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The following information is available regarding Krusty's Fried Chicken for the month of October: Revenue $67,500 Total direct material cost $11,500 Total direct labor cost
The following information is available regarding Krusty's Fried Chicken for the month of October: Revenue $67,500 Total direct material cost $11,500 Total direct labor cost $4,000 $7,500 $2,000 Total variable manufacturing overhead cost Total fixed manufacturing overhead cost Total variable marketing cost Total fixed marketing cost $12,000 $6,000 Total fixed administrative cost $8,000 The firm is considering switching to a new chicken supplier, which would reduce direct material costs by 20% but increase direct labor costs by 30%. Revenues and all other costs would remain the same. The relevant costs for this decision include: Direct labor only Direct materials and direct labor only Direct materials only Total manufacturing costs None of the other answers is correct
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