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Pedal Bikes sells unassembled bicycles. Recently, the firm contemplated switching to production of fully assembled bikes, but it determined the net income per unit for
Pedal Bikes sells unassembled bicycles. Recently, the firm contemplated switching to production of fully assembled bikes, but it determined the net income per unit for the assembled bikes would be $25 lower than that for the unassembled bikes. Shortly after reaching this conclusion, Pedal discovered that it had underestimated its fixed production costs for the unassembled bikes by $20 and overestimated its variable production costs to assemble the bikes by $10. Given these corrected estimates,
- A:it cannot be determined which type of bike Pedal should sell.
- B:Pedal should switch to selling assembled bikes.
- C:it makes no difference which type of bike Pedal chooses to sell.
- D:Pedal should continue selling unassembled bikes.
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