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Paterno Co. produces football goal posts for sale to college and professional football teams. The variable and fixed costs to product a goal post are
Paterno Co. produces football goal posts for sale to college and professional football teams. The variable and fixed costs to product a goal post are as follows: Bowden Corp. has recently approached Paterno with an offer to supply Paterno with finished goal posts that Paterno would then resell under the Paterno name. The price of on goal post from Bowden is $490. If Paterno purchased goal post from Bowden. all of the fixed costs would continue to be incurred, but they would be able to eliminate half of the selling and administrative costs that are associated with the production and sale of their goal posts. The other variable costs would not be incurred because they would not need to pay any production costs If they purchased goal posts from an outside supplier Should Paterno Accept Bowden's offer, why or why not? What is the maximum price paterno would be willing to pay boder
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