Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 40,000 parts is $140,000, which includes

image text in transcribed

Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 40,000 parts is $140,000, which includes fixed costs of $69,000 and variable costs of $71,000. The company can buy the part from an outside supplier for $3.70 per unit, and avoid 30% of the fixed costs. If Blue Ridge Bicycles makes the part, how much will its operating income be? O A. $56,300 greater than if the company bought the part B. $56,300 less than if the company bought the part OC. $89,700 greater than if the company bought the part D. $89,700 less than if the company bought the part

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Budget Bible Budgeting Made Simple

Authors: Jessica Charise Brant, Adrienne Homet Hand

ISBN: 979-8218059880

More Books

Students also viewed these Accounting questions

Question

Name two supply chain performance metrics and explain them.

Answered: 1 week ago