- 75 hamrock Company manufactures bicycles. It recently received a request to manufacture 15 units of a mountain bike at a price lower han it normally accepts. Matthew, the sales manager, indicated that, if the order were accepted at that price, the company could expect additional orders from the same client. Matthew believes that, if Shamrock could offer this price in the market generally, sales of this bike would increase by 30%. Kimberly, president of Shamrock, is skeptical about accepting the order. The company has a policy of not accepting any order that does not provide a markup of 20% on full manufacturing costs. The price offered is $605 per bike. The controller, Sanjay, has recently researched the possibility of using activity-based multiple overhead rates instead of the single rate currently in use. He has promised more accurate estimated overhead product costing, and Kimberly is curious about how this approach would affect product costing and pricing of the mountain bike. The plant-wide overhead rate is based on an estimated volume of 10,000 direct labour hours and the following budgeted overhead: $74,700 46,800 Machine operating costs Rework labour Inspection Scrap costs General factory overhead 25,000 38,400 122,000 Total $306,900 Estimated activities for selected cost drivers for 2022: The plant-wide overhead rate is based on an estimated volume of 10,000 direct labour hours and the following budgeted overhead: $74,700 46,800 25,000 Machine operating costs Rework labour Inspection Scrap costs General factory overhead Total 38,400 122.000 $306,900 Estimated activities for selected cost drivers for 2022: 24,900 600 Machine hours Units reworked Inspection hours Units scrapped 500 160 Direct labour hours 12.200 Question 5 of 5 Estimated activities for selected cost drivers for 2022: Machine hours 24.900 600 500 Units reworked Inspection hours Units scrapped Direct labour hours 160 12,200 Estimated data for the production of one mountain bike: $ 160 $180 8 Direct materials Direct labour (10 hours/unit) Number of machine hours Number of units reworked Number of inspection hours Number of units scrapped 0.25 0.1 0.05 Attempts: unlimited (61) 1. Using activity-based costing to assign overhead, calculate the normal selling price per mountain bike. (Round answer to 2 decimal places, eg. 15.25.) Normal selling price per mountain bike $ 2. Determine whether or not Shamrock should accept the order for the 15 mountain bikes. Shamrock should the order for the 15 mountain bikes e Textbook and Media Save for Later Attempts: unlimited Submit Answer MacBook