20.

Reuben's Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are:

Costs	Amounts	Increments
Materials	$0.24	per roll
Labor	0.40	per roll
Variable overhead	0.16	per roll
Fixed overhead	0.20	per roll

A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. Should Reuben buy or make the rolls?

buy rolls or make the rolls

21. Reuben's Deli currently makes rolls for deli sandwiches it produces. It uses 36,687 rolls annually in the production of deli sandwiches. The costs to make the rolls are:

Costs	Amounts	Increments
Materials	$0.25	per roll
Labor	0.43	per roll
Variable overhead	0.15	per roll
Fixed overhead	0.25	per roll

A potential supplier has offered to sell Reuben the rolls for $1.19 each. If the rolls are purchased, 22% of the fixed overhead could be avoided.

If Reuben accepts the offer, what will the effect on profit be? Do not round until the final calculation - then round to the nearest penny, two decimal places. If the effect is negative, use a dash - not parentheses ( ).

22. Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal:

Costs	Amounts
Direct material	$13,000
Direct labor	5,000
Manufacturing overhead	7,000

The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. What are the total relevant costs?