Bonzai Company grows and sells Bonzai trees

Subject:BusinessPrice:2.86 Bought7

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Bonzai Company grows and sells Bonzai trees. It also makes the pot that holds the trees at a cost

of $10 per pot. The cost of the pot includes an allocation of $3 of fixed overhead. The company

makes 10,000 trees each year.

Potsdam Industries approaches Bonzai and offers to sell it pots for only $9.

Instructions

Calculate the impact that purchasing the pots from Potsdam would have on Bonzai's net income.