Der Dutchman is a large family- style restaurant chain located throughout the Midwest in Amish communities. Currently Der Dutchman makes its own biscuits. Customers love these biscuits; they are light, fluffy, and incredibly delicious. People are not eating out at restaurants as much as they did before the recession hit in 2007. Like many other restaurants, Der Dutchman is under increasing pressure to control its costs to help to counteract the lower number of diners. As part of its efforts to remain cost competitive, Der Dutchman is analyzing whether it should continue to make its own biscuits or to outsource part of the biscuit- making process by purchasing ready- made dough from a national supplier. Seth McGilvrey works as a management accountant at the Der Dutchman restaurant group. Seth is asked by the controller to analyze whether the biscuits should continue to be made in- house from scratch or if the company should purchase ready- made dough from a national supplier. Seth’s mother- in- law, Audrey Parsons, is a salesperson for a national food manufacturer. He decides to get a bid from her before contacting any other suppliers. Audrey has been struggling financially since the illness and subsequent death of Seth’s father- in- law last year and could use the sales commissions generated by this order. Seth emails Audrey and asks her for a bid price for the ready- made dough. Audrey sends him a price of $ 33.20 per case (a case of dough makes 12 dozen biscuits.) Se
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