Problem 2: Laniper Bicycles

Laniper Bicycles (LB) produces and sells two bicycles: (1) the Mountain Bike for $109/unit, and (2) the Road Bike for $99/unit. Recently LB undertook a costing study to better determine the manufacturing costs of producing each bicycle, as follows:

Mountain Road Direct materials $34.50/unit $27.25/unit Direct labor $15.00/unit $22.50/unit Variable overhead $13.60/unit $10.20/unit Fixed overhead $10.00/unit $15.00/unit