Litto Fray's Produces Corn Chips An Outside Supplier Has Offered to Produce the Corn Chips

question 43

Multiple Choice

Litto Fray's produces corn chips.The cost of one batch is below: $$\begin{array} { l r } \text { Direct materials } & \$ 18.00 \\\text { Direct labour } & 13.00 \\\text { Variable overhead } & 12.00 \\\text { Fixed overhead } & 14.00\end{array}$$ An outside supplier has offered to produce the corn chips for $26 per batch.How much will Litto Fray save if it accepts the offer?

• A)$2.00 per batch
• B)$17.00 per batch
• C)$31.00 per batch
• D)$6.00 per batch

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