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Big Burger Co (BBC) is currently making all of its burger patties in-house by hand using premium ingredients. It makes and sells 60,000 patties per
Big Burger Co (BBC) is currently making all of its burger patties in-house by hand using premium ingredients. It makes and sells 60,000 patties per year. The patty is used in most of the menu items at BBC. Total 36 Direct materials Direct labour Supervisor Depreciation on Mixer Variable manufacturing overhead Rent Total production cost Per Unit $ 80 2.4 1.50 1.00 1.0 0.30 $7.00 $90,000 60,000 18,000 An outside supplier has offered to sell a similar patty to BBC for $4.95. The mixer currently being used cannot the used elsewhere and its salvage value is zero. The supervisor will be reallocated in another department with a salary of $75,000. Rent is allocated cost and would still remain with the company even if BBC stops making patty inside. Required: Prepare computations to show for 60,000 units the dollar advantage or disadvantage per period of buying patty from outside supplier. (Do not round intermediate calculations.) h
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