Question
Cycle Business manufactures and sells road and mountain bikes through a network of retail outlets in western Canada. Below is a partial list of expense
Cycle Business manufactures and sells road and mountain bikes through a network of retail outlets in western Canada. Below is a partial list of expense items incurred in the most recent month (November), when 1,100 bicycles were manufactured, shipped, and sold. There was no beginning or ending work in process or finished goods inventory in November:
Item October November
Units produced and sold 1,000 1,100
Sales $1,000,000 $1,100,000
Electricity used in the production facilities* 1,150 1,250
*Each month, regardless of how much electricity is used, Cycle Business pays a $150 base charge to the utility company.
Assume that 1,300 bicycles will be manufactured and sold in December
what is the cost of the electricity used in the production facilities in December
Please show calculations
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