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Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make
Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are:
Materials | $0.34 per roll |
Labor | $0.40 per roll |
Variable overhead | $0.15 per roll |
Fixed overhead | $0.21 per roll |
A potential supplier has offered to sell Reuben the rolls for $1.00 each. If the rolls are purchased, 35.00% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the be profit/loss per roll? [Hint: Enter your answer as POSITIVE for profit, NEGATIVE for loss]
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