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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 $21,161 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal:
Costs | Amounts |
---|---|
Direct material | $13,534 |
Direct labor | 6,177 |
Manufacturing overhead | 6,572 |
The manufacturing overhead consists of $2,942 of variable costs with the balance being allocated to fixed costs. If Almond Treats buys the cereal, what is the effect on profit? If the effect is negative, use a dash - not parentheses ( ).
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