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Reuben's Dell currently makes rolls for deli sandwiches it produces. It uses 27,000 rolls annually in the production of deli sandwiches. The costs to
Reuben's Dell currently makes rolls for deli sandwiches it produces. It uses 27,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are:- Materials Labor $0.23 per roll 0.39 per roll Variable overhead 0.15 per roll Fixed overhead 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.87 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? Reuben would see a s decline v in profit if he buys the rolls.
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