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Benson Bike Company makes the frames used to build its bicycles. During 2018. Benson made 20,000 frames; the costs incurred follow: Unit-level materials costs [20, 000 units x $47] $ 940,000 Unit-level labor costs [20,000 units I $52) 1,040,000 Unit-level overhead costs (20, 000 x $10] 200,000 Depreciation on manufacturing equipment 92,000 Bike frame production supervisor's salary 80,000 Invent-Juryr holding costs 340,000 Allocated portion of facility-level costs 435100\" Total costs 5311721090 Benson has an opportunity to purchase 'ames for $120 each. Additional Information 1. The manufacturing equipment, which originally cost $550,000, has a book value of $430,000. a remaining useful life of four years. and a zero salvage value. If the equipment is not used to produce bicycle frames, it can be leased for $36,000 per year. 2. Benson has the opportunity to purchase for $850,000 new manufacturing equipment that will have an expected useful life of four years and a salvage value of $28,000. This equipment will increase productivity substantially. reducing unit-level labor costs by 50 percent. Assume that Benson will continue to produce and sell 20,000 frames per year in the future. 3. If Benson outsources the frames, the company can eliminate 80 percent of the inventory holding costs. Required 3. Determine the avoidable cost per unit of making the bike frames. assuming that Benson 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 Benson outsource the bike frames? b. Assuming that Benson 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 prot if the company uses new equipment 1:. Assuming that Benson is considering whether to either purchase the new equipment or outsource the bike frame, calculate. Required a. Determine the avoidable cost per unit of making the bike frames. assuming that Benson 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 Benson outsource the bike frames? b. Assuming that Benson 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 oost per unit to produce the bike frames using the old equipment. Calculate the increase or decrease in the company's prot if the company uses new equipment. 1:. Assuming that Benson is considering whether to either purchase the new equipment or outsource the bike frame, calculate. Complete this question Mr entering your answers In the tabs below. Required A Required B Required C Determine the avoidable oost per unit of making the bike frames, assuming that Benson 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 Benson outsource the bike frames? {Round your answer to 2 decimal places.) Avoidable oost per unit for making the product Benson should outsource the bike frames? Complete this question by entering your answers in the tabs below. Required A Required B Required C Assuming that Benson 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 "Avoidable cost per unit" to 2 decimal places.) Show less A Old Equipment New Equipment Avoidable cost per unit Profit must byComplete this question by entering your answers in the tabs below. Required A Required B Required C Assuming that Benson is considering whether to either purchase the new equipment or outsource the bike frame, calculate. (Do not round intermediate calculations.) Should Benson purchase new equipment or outsource? Profit must by
