Question
The Garden Griddle has a special recipe for their very own hamburger buns. They make 30,000 of these buns for their production of hamburgers. The
The Garden Griddle has a special recipe for their very own hamburger buns. They make 30,000 of these buns for their production of hamburgers. The cost to make the buns are as follows:
Fixed Overhead $.20 per bun
Variable Overhead $.16 per bun
Materials $.24 per bun
Labor $.40 per bun
Hot Buns, a specialty hamburger buns supplier, has offered to sell The Garden Griddle their hambuger buns for $.90 each. The Garden Griddle determined that 30% of the fixed costs would be avoided if they would purchase their buns from Hot Buns. If The Garden Griddle decides to accept the offer, what will the impact be on the company's profit?
Effect on Profit |
Increase or Decrease?
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