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Cuyahoga Valley Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 41,000 parts is $141,000, which includes
Cuyahoga Valley Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 41,000 parts is $141,000, which includes fixed costs of $700,000 and variable costs of $71,000. The company can buy the part from an outside supplier for $3.7 per unit, and avoid 30% of the fixed costs. If Cuyahoga Valley Bicycles makes the part, how much will its operating income be? A. $91,000 less than if the company bought the part B. $59,700 greater than if the company bought the part C. $91,000 greater than if the company bought the part D. $59,700 less than if the company bought the part
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