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[The following information applies to the questions displayed below.] Mel's Meals 2 Go purchases cookies that it Includes in the 10,000 box lunches it prepares
[The following information applies to the questions displayed below.] Mel's Meals 2 Go purchases cookies that it Includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.70 each but is considering making them Instead. Mel's can bake each cookle for $0.24 for materials, $0.15 for direct labor, and $0.59 for overhead without Increasing its capacit The $0.59 for overhead Includes an allocation of $0.32 per cookle for fixed overhead. However, total fixed overhead for the company would not Increase if Mel's makes thecookles. Mel himself has come to you for advice. "It would cost me $0.98 to make the cookies, but only $0.70 to buy. Should I continue buying them?" Materials and labor are variable costs, but variable overhead would be only $0.27 per cookle. Two cookies are put into every lunch. Required Information 7.50 points Required: a. Prepare a schedule to show the differential costs per cookie. (Round your answers to 2 decimal places. Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo Alternative (Buy) (Make) Difference (Buy- Make) Cost to buy Direct material Direct labor Variable overhead Total costs $ 0.00 $ 0.00
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