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Problem 5.38A a1, bi (Part Level Submission) Kiddy Company manufactures bicycles. It recently received a request to manufacture 15 units of a mountain bike at a price lower than it normally accepts. Bruce, the sales manager, indicated that, if the order were accepted at that price, the company could expect additional orders from the same client. Bruce believes that, if Kiddy could offer this price in the market generally, sales of this bike would increase by 30%. Melany, president of Kiddy, is sceptical about accepting the order. The company has a policy of not accepting any order that does not provide a markup of 20% on full manufacturing costs. The price offered is $575 per bike. The controller, Sanjay, has recently researched the possibility of using activity-based multiple overhead rates instead of the single rate currently in use. He has promised more accurate estimated overhead product costing, and Melany is curious about how this approach would affect product costing and pricing of the mountain bike. The plant-wide overhead rate is based on an estimated volume of 10,000 direct labour hours and the following budgeted overhead: Machine operating costs $75,900 Rework labour 48,000 Inspection 26,500 Scrap costs 37,500 General factory overhead 111,600 Total $299,500 Estimated activities for selected cost drivers for 2020: Machine hours 25,300 Units reworked 600 Inspection hours 500 Units scrapped 150 Direct labour hours 12,400 Estimated data for the production of one mountain bike: Direct materials $ 150 Direct labour (8 hours/unit) $170 Number of machine hours 7 Number of units reworked 0.25 Number of inspection hours 0.10 Number of units scrapped 0.05 (al) 1. Using the single-rate method to assign overhead on a plant-wide basis, calculate the normal selling price per mountain bike. (Round answer to 2 decimal places e.g. 15.25.) Normal selling price per mountain bike $ 2. Determine whether or not Kiddy should accept the order for the 15 mountain bikes. refuse Kiddy should the order for the 15 mountain bikes 1. Using activity-based costing to assign overhead, calculate the normal selling price per mountain bike. (Round answer to 2 decimal places, e.g. 15.25.) Normal selling price per mountain bike $ 2. Determine whether or not Kiddy should accept the order for the 16 mountain bikes. Kiddy should the order for the 16 mountain bikes