Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Jordan produces and sells only 6,200 bikes each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For example, Jordan could buy the handlebars for $43 each; they cost $46 each to make. The following is a detailed breakdown of current production costs. Unit Item Total Cost Unit-level costs Materials $ 18 $ 111,600 Labor 11 68,200 Overhead 3 18,600 Allocated facility-level 14 86,800 costs Total $46 $285,200 After seeing these figures, Jordan's president remarked that it would be foolish for the company to continue to produce the handlebars at $46 each when it can buy them for $43 each. Required: a. Calculate the total relevant cost. Per Unit Total Total relevant cost $ 198,400 $ 43