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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
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 $22,200 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $12,900 Direct labor 4,900 Manufacturing overhead 6,900 Total $24,700 The manufacturing overhead consists of $1,800 of variable costs with the balance being allocated to fixed costs. A. Calculate the differential cost of Acme? 8. Should Almond Treats make or buy the almond cereal? Make
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