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Problem 5. Mama mug, Inc. makes the best pies in the world. Her pics are so popular that they are shipped all over the island.

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Problem 5. Mama mug, Inc. makes the best pies in the world. Her pics are so popular that they are shipped all over the island. For 40 years, the rm has made its own crusts along with the delicious lling that goes in. Using an ABC system that Mama's nephew, who has an MBA, implemented, the cost of the crusts is: DM $.25 DL .50 OH 3 Total Cost $1.50 The ABC system contains three cost pools. Costs are almost entirely xed in all three cost pools. Recently, a new supplier has been established by a local entrepreneur. The new rm has offered to make all the pie crusts Mama needs for $.80 each. Mama would save $.70 per pie. Currently, Mama makes 1,500 pies per month. Her nephew tells her that her rm is operating at capacity. He suggests that buying the pies from the new supplier would allow them to increase the number of pies they sell by 100 per month. He says that would increase the lm's contribution margin by $500 per month. Mama doesn't know what a contribution margin is, but she thinks doing things herself the way she always has is the best idea. l.What would be the impact on net income of buying the pie crusts from the new supplier and producing more pies? You may assume that any pics Mama makes can be sold

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