Panera bakes its rolls for sandwiches and uses $25,000$ rolls annually. The following are the costs associated with the rolls:

Materials

Labor

Variable overhead

Fixed Overhead

$$\mathrm{.}30$ per roll

$$\mathrm{.}30$ per roll

$$\mathrm{.}20$ per roll

$$0\mathrm{.}10$ per roll

McDonald's offer to sell Panera the rolls for $$0\mathrm{.}85$ per roll. If the rolls are purchased $10\%$ of fixed overhead could be avoided

Should Panera accept the offer?

Panera should not accept the offer because the profit would decline by $1,000$

We need more information to determine the outcome.

Panera should not accept the offer because the profit would decline by $1,600$

Panera should not accept the offer because the profit would incline by $1,000$