CALCULATOR Exercise 188 (Part Level Submission) Kuhn Bicycle Company has been manufacturing its own seats for its bicycles. The company is currently operating at 100% capacity and variable manufacturing overhead is charged to production at the rate of 60% of direct labor cost. The direct materials and direct labor cost per unit to make the bicycle seats are $8.00 and $9.00, respectively. Normal production is 50,000 bicycles per year, A supplier offers to make the bicycle seats at a price of $21 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $30,000 of fixed manufacturing overhead currently being charged to the bicycle seats will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the bicycle seats. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any field blank. Enter o for the amounts.) Net Income Make Buy Increase (Decrease) Direct Material 400,000 0 $ 400,000 Direct Labor 450,000 0 450,000 Variable Manufacturing Costs 270,000 0 270,000 Fixed Manufacturing Costs 30,000 30,000 0 Purchase Price o 1050,000 (1,050,000) 1107 AM D search O