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Allie's Dining Solutions specializes in selling classic Italian dishes to tourists. Allie's produces its pasta...

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Accounting

Allie's Dining Solutions specializes in selling classic Italian dishes to tourists. Allie's produces its pasta dishes in-house. Below are monthly production costs for 2,000 plates ofDirect MaterialsDirect LaborVariable Overhead CostFixed Overhead CostTotal$4,000$6,000$8,800$4,000$22,800Allie's receives an offer to outsource pasta production to a third party for $8 per plate. It is estimated that 30% of the fixed overhead costs assigned to pasta manufacturing will no longer be incurred if Allie's outsources its production.

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