Reuben's 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 Labor Variable overhead Fixed overhead $0.24 per roll 0.40 per roll 0.16 per roll 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be? Relevant Costs Materials $ 0.24 Labor S 0.40 Variable Overhead $ 0.16 Fixed Overhead (30% of $.20) $ 0.06 S Total Cost (30,000 Rolls Per Year) $ Offer by Supplier $ 0.90 Total Cost (30,000 Rolls Per Year) $ Continue Manufaturing $ Purchase from Supplier $ Increase/Decrease in Profit $ - - - Reuben's 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 Labor Variable overhead Fixed overhead $0.24 per roll 0.40 per roll 0.16 per roll 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be? Relevant Costs Materials $ 0.24 Labor S 0.40 Variable Overhead $ 0.16 Fixed Overhead (30% of $.20) $ 0.06 S Total Cost (30,000 Rolls Per Year) $ Offer by Supplier $ 0.90 Total Cost (30,000 Rolls Per Year) $ Continue Manufaturing $ Purchase from Supplier $ Increase/Decrease in Profit $