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Please answer these clearly and show step-by-step in how you get the answer please . Thank you! Problem #6 8 points Make or Bu pany
Please answer these clearly and show step-by-step in how you get the answer please. Thank you!
Problem #6 8 points Make or Bu pany has been manufacturing its own seats for its bicycles. The company is currently rect labor cost per unit to make the bicycle seats Kuhn Bicycle Com capacity, and variable manufacturing overhead is charged to production at the 00, respectively. Normal production is 50,000 bicycles per year. operating at 100% of60%Of direct labor cost. The direct materials and are $8.00 and $9. price of S21 each. If the bicycle company accepts this e manufacturing costs will be eliminated, but the $30,000 of fixed manufacturing A supplier offers to make the bicycle seats at a offer, all variabl overhead currently being charged to the bicycle seats will have to be absorbed by other products. Instructions Prepare the incremental analysis for the decision to make or buy the bicycle seats. Should Kuhn Bicycle Company buy the seats from the outside supplier? Justify your answer. (a) (b)Step by Step Solution
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