1. Speedy Bikes currently sells its bicycles to retailers unassembled for $450 each. The cost to manufacture an unassembled bike is as follows Direct materials Direct labor Variable overhead Fixed overhead Manufacturing cost per unit $150 70 49 21 $290 Speedy currently has unused productive capacity and management has concluded that some of this capacity could be used to assemble the bikes and instead sell them to retailers for $495 each Assembling the bikes will increase direct materials by $5 per bike, and direct labor by $10 per bike. Additional variable overhead cost will be $7 per bike, but there will be no additional fixed overhead as a result of assembling the bikes. Prepare an analysis to determine if the bikes should be sold as is (unassembled) or processed further and sold as assembled bikes