Feast Corporation currently makes the rolls that it uses for its sandwiches, It uses 50,000 rolls annually. The costs to make the rolls are given below:
Material= 0.04 per roll
Labor = 0.03 per roll
Variable overhead = 0.02 per roll
Fixed overhead = 0.07 per roll
A potential supplier has offered to sell Feast the rolls for 0.11 each. If the rolls are purchased, 20% of the fixed overheads could be avoided. If Feast accepts the offer it will be?