Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,200 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,100 Direct labor 5,100 Manufacturing overhead 7,000 Total $25,200 The manufacturing overhead consists of $1,800 of variable costs with the balance being allocated to fixed costs. Calculate the differential cost of Acme?
Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,200 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,100 Direct labor 5,100 Manufacturing overhead 7,000 Total $25,200 The manufacturing overhead consists of $1,800 of variable costs with the balance being allocated to fixed costs. Calculate the differential cost of Acme?
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 7EA: Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has...
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Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,200 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal:
| Direct material | $13,100 |
| Direct labor | 5,100 |
| Manufacturing overhead | 7,000 |
| Total | $25,200 |
The manufacturing overhead consists of $1,800 of variable costs with the balance being allocated to fixed costs.
Calculate the differential cost of Acme?
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