King City Specialty Bikes (KCSB) produces high-end bicycles. Costs to manufacture and market the bicycles at last year's volume level of 2,000 bicycles per month are shown in the following table: Variable manufacturing per unit Total fixed manufacturing Variable nonmanufacturing per unit Total fixed nonmanufacturing $255 $238,000 $51 $284,000 KCSB expects to produce and sell 2,350 bicycles per month in the coming year. The bicycles sell for $570 each. An outside contractor makes an offer to assemble KCSB's bicycles and ship them directly to KCSB's customers as orders are received from its sales force. It will charge KCSB $150 per bicycle. KCSB would provide the materials for each bicycle, but the outside contractor would assemble, box, and ship them. If KCSB accepts the offer, its variable manufacturing costs would be reduced by 30%, and its variable nonmanufacturing costs would be cut by 55%. In addition, it would be able to save $23,800 of fixed manufacturing costs; fixed nonmanufacturing costs would be unchanged. KCSB's marketing and production managers think that the idle resources could be used to produce and sell 70 more motorized bicycles, each with an estimated $800 contribution margin and no additional fixed costs. REQUIRED [Note: Round unit cost computations to the nearest cent] What is the difference in KCSB's monthly costs between accepting the proposal and rejecting the proposal? (Note: If the costs of accepting the proposal are less than the costs of rejecting it, enter the difference as a positive number; if the accept costs are more than the reject costs, enter the difference as a negative number.) Submit Answer Tries 0/6