Baird Bike Company makes the frames used to build its bicycles. During 2018, Baird made 23,000 frames; the costs incurred follow Unit-level materials costs (23,000 units x $46) Unit-level labor costs (23,000 units $511) Unit-level overhead costs (23,000 $14 Depreciation on manufacturing equipment Bike frane production supervisor's salary Inventory holding costs Allocated portion of facility-level costs Total costs 1,058,000 1,173,000 322,000 86,000 69,500 270,000 530,000 $3,508,500 Baird has an opportunity to purchase frames for $109 each. Additional Information 1. The manufacturing equipment, which originally cost $570,000, has a book value of $451,000, a remaining useful life of four years, and a zero salvage value. If the equipment is not used to produce bicycle frames, it can be leased for $75,000 per year 2. Baird has the opportunity to purchase for $930,000 new manufacturing equipment that will have an expected useful life of four 3. If Baird outsources the frames, the company can eliminate 70 percent of the inventory holding costs Required a. Determine the avoidable cost per unit of making the bike frames, assuming that Baird is considering the alternatives of making the b. Assuming that Baird is considering whether to replace the old equipment with the new equipment, determine the avoidable cost per c. Assuming that Baird is consideting whether to either purchase the new equipment or outsource the bike frame, calculate. years and a salvage value of $59,600. This equipment will increase productivity substantially, reducing unit-level labor costs by 70 percent. Assume that Baird will continue to produce and sell 23,000 frames per year in the future. product using the existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data, should Baird outsource the bike frames? unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment Prev 4 of 4Next> Check my work Required a. Determine the avoidable cost per unit of making the bike frames, assuming that Baird is considering the alternatives of ma existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data. should Baird outsource the bike frames? b. Assuming that Baird is considering whether to replace the old equipment with the new equipment, determine the avoidable cost per unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the b equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment ike frames using the old c. Assuming that Baird is considering whether to either purchase the new equipment or outsource the bike frame, calculate. Complete this question by entering your answers in the tabs below Required ARequired B Required C Determine the avoidable cost per unit of making the bike frames, assuming that Baird is considering the alternatives of making the product using the existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data, should Baird outsource the bike frames? (Round your answer to 2 decimal places) voidable cost per unit for making the product Baird should outsource the bike frames? $ 99.52 per unt Required B>
