Perez Bike Compary makes the frames used to build its bicycles. During year 2, Perez made 24,000 frames; the costs incurred follow. Perez has an opportunity to purchase frames for $118 each. Additional Information 1. The manufacturing equipment, which originally cost $570,000, has a book value of $460,000, a remaining useful life of 5 years, and a zero salvage value. If the equipment is not used to produce bicycle frames, it can be leased for $69,000 per year: 2. Perez has the opportunity to purchase for $920,000 new manufacturing equipment that will have an expected usefur life of 5 years and a salvage value of $71,000. This equipment will increase productivity substantially, reducing unit-level labor costs by 60 percent. Assume that Perez will continue to produce and sell 24,000 fromes per year in the future- 3. If Perez outsources the frames, the company can eliminate 80 percent of the inventory holding costs Required a. Determine the avoidable cost per unit of making the bike frames, assuming that Perez is considering the aiternatives of making the product using the existing equipment or outsourcing the product to the independent contractor Based on the quantitative data. should Perez outsource the bike frames? b. Assuming that Perez is considering whether to replace the old equipment with the new equipment, determine the avoidable cost per unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment. a. Determine the avoidable cost per unit of making the bike frames, assuming that Perez is considering the alternatives of making the product using the existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data, should Perez outsource the bike frames? b. Assuming that Perez is considering whether to replace the old equipment with the new equipment, determine the avoidable cost per unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment. c. Assuming that Perez is considering whether to either purchase the new equipment or outsource the bike frame, calculate the impact on profitability between the two alternatives. Complete this question by entering your answers in the tabs below. Determine the avoidable cost per unit of making the bike frames, assuming that Perez is considering the aiternatives of making the product using the existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data, should Perez outsource the bike frames? (Round your answer to 2 decimal places.) Required a. Determine the avoidable cost per unit of making the bike frames, assuming that Perez is considering the alternatives of making the product using the existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data, should Perez outsource the bike frames? b. Assuming that Perez is considering whether to replace the old equipment with the new equipment, determine the avoidable cost per unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment. c. Assuming that Perez is considering whether to either purchase the new equipment or outsource the bike frame, calculate the impact on profitability between the two alternatives. Complete this question by entering your answers in the tabs below. Assuming that Perez is considering whether to replace the old equipment with the new equipment, determine the avoidable cost per unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment. (Round "Avoldable cost per unit" to 2 decimal places.) Required a. Determine the avoidable cost per unit of making the bike frames, assuming that Perez is considering the alternatives of making the product using the existing equipment or outsourcing the product to the independent contractor. Based on the quantitative data. should Perez outsource the bike frames? b. Assuming that Perez is considering whether to replace the old equipment with the new equipment, determine the avoldable cost per unit to produce the bike frames using the new equipment and the avoidable cost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's profit if the company uses new equipment. c. Assuming that Perez is considering whether to either purchase the new equipment or outsource the bike frame, calculate the impact on profitability between the two alternatives. Complete this question by entering your answers in the tabs below. Assuming that Perez is considering whether to either purchase or outsouroe, calculate the impact on profitability between the two alternatives. (Do not round intermediate calculations.)