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Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 42 comma 000 42,000 parts is
Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 42 comma 000
42,000 parts is $ 140 comma 000
$140,000, which includes fixed costs of $ 69 comma 000
$69,000 and variable costs of $ 71 comma 000
$71,000. By outsourcing thepart, the company can avoid30% of the fixed costs.
If Blue Ridge Bicycles buys thepart, what is the most Blue Ridge Bicycles can spend per unit so that operating income equals the operating income from making thepart? (Round the final answer to the nearestcent.)
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