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g A foreign factory has offered to supply with ready-made baskets for a price of $12 per basket. Assume that fixed costs are unavoidable, but that could use the vacated production facilities to earn an additional $8500 of profit per month. If Fruit Basket Company decides to outsource, monthly operating income will increase by ________.

Respuesta :

Answer:

The answer is "$5500".

Explanation:

Analysis Differential:  

                                             Make                            Buy

Cost of variable                        [tex]800\times 7 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ = 5600[/tex]  

Fixed- cost                             [tex]16000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 16000[/tex]

Purchasing cost                                                    [tex]800\times 12\ = 9600[/tex]

Cost of opportunity            [tex]\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 9500[/tex]  

Total relevant cost                    [tex]31100 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 25600[/tex]

Increasing operating income [tex]= 31100-25600 = 5500[/tex]

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