Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has approached Oat Treats with a proposal to sell the company its top selling oat cereal bar at a price of $27,500 for 20,000 bars. The costs shown are associated with production of 20,000 oat bars currently: Direct material Direct labor Manufacturing overhead Total The manufacturing overhead consists of $3,000 of variable costs with the balance being allocated to fixed costs. PLEASE NOTE: Costs per unit are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All other dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). $14,000 6,000 8,000 $28,000 1. What is Oat Treats' relevant cost? 2. What does Simmons Cereal's offer cost? 3. If Oat Treats accepts the offer, what will the effect on profit be? • Incremental dollar amount = o Increase or Decrease? no quotes. . Please note: Your answer is either "Increase" or "Decrease" - capital first letters and

Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has approached Oat Treats with a proposal to sell the company its top selling oat cereal bar at a price of $27,500 for 20,000 bars. The costs shown are associated with production of 20,000 oat bars currently: Direct material Direct labor Manufacturing overhead Total The manufacturing overhead consists of $3,000 of variable costs with the balance being allocated to fixed costs. PLEASE NOTE: Costs per unit are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All other dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). $14,000 6,000 8,000 $28,000 1. What is Oat Treats' relevant cost? 2. What does Simmons Cereal's offer cost? 3. If Oat Treats accepts the offer, what will the effect on profit be? • Incremental dollar amount = o Increase or Decrease? no quotes. . Please note: Your answer is either "Increase" or "Decrease" - capital first letters and

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 7EB: Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has...

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