King City Specialty Bikes (CSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2.000 units per month are shown in the following table $240 Unit statuts Vartout Fixed overhead Total unit manufacturing uit factoring costs Wahle xod Total Ante Total wat coats 356 The company has the capacity to produce 2.000 unts per month and always operates of full capacity. The bicycles sel for $600 per unit Required: AKCSB receives a proposal from an outside contractor who will assemble 800 of the 2,000 bicycles per month and ship them directly to KCSE's customers as orders are received from KCSE's sales force, KCSB would provide the materials for each bicycle, but the outside contractor would assemble, box, and ship the bicycles. The variable manufacturing costs would be reduced by 40 percent for the 800 bicycles assembled by the outside contractor KCSB's fed nonmanufacturing costs would be unaffected, but its variable nonmanufacturing costs would be cut by 60 percent for these 800 units produced by the outside contractor KCSB's plant would operate at 60 percent of its normal level, and total fixed manufacturing costs would be cut by 20 percent 1. What in-house unit cost should be compared with the quotation received from the outside contractor? Assume the payment to the outside contractor is $140, --2. Should the proposal be accepted for a price that is, payment to the contractors of $140 per unit? b. Assume the same facts as in requiremental) but assume that the freed-up facilities by having 800 bicycles assembled outside would be used to produce o specialty racing bicycles per month. Making and selling the racing bicycles would generates 5176,000 contribution margin without changing any fixed costs. -1. Considering this opportunity to use the freed-up space, what is the maximum purchase price per unit that KCS should be willing to pay the outside contractor to assemble regular bicycles? b-2. Should the contractor's proposal of $140 per unit be accepted? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Red As RA Weg 51 Rec 12 K058 receives a proposal from an outside contractor who will be bob of the 2.000 bicycles per month and ship them directly to KCSO's customers as orders are received from KCS's salesforce. KCS would provide the materials for each bicycle, but the outside contractor would emble, bar, and ship the bicycles. The variable marfacturing costs would be reduced by 40 percent for the 800 bieydes sembled by the outside contractar. KCSB'Sed non manufacturing costs would he unaffected, but its variable nonmanufacturing costs would be cut by 60 percent for these 500 units produced by the outside contractor. KCSO's plant would operate at 60 percent of malevel, and total feed manufacturing costs would be cut by 20 percent Al. What in-house unit cost should be compared with the quotation received from the outside wor? Am the payment to the outside contractors $140. Shaw MacBook Air es - 20