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XYZ Company makes cookies to be included in a food gift basket. The cookies have a variable cost of $2.25 per package and fixed cost
XYZ Company makes cookies to be included in a food gift basket. The cookies have a variable cost of $2.25 per package and fixed cost of $1.50 per package. Similar cookies could be purchased for $3.50 per package. One package is included in each food gift basket. The fixed cost is AVOIDABLE (will be incurred only when producing cookies) and the cost to make is $3.75 and the cost to buy is $3.50. Given that the cost to make the cookies is $3.75 and the cost to buy the cookies is $3.50, should we make or buy the cookies and why? make the cookies because we save $.25 per package make the cookies because we save $1.25 per package buy the cookies because we save $.25 per package buy the cookies because we save $1.25 per package
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