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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
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
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