Question 6 Flounder Rides makes bicycles. It has always purchased its bicycle tires from the Balyo Tires at $10 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: $3 Direct materials Direct labor Variable manufacturing overhead $4 $1 The company's fixed expenses would increase by $28,250 per year if managers decided to make the tire. (a1) Calculate total relevant cost to make or buy if the company needs 5,030 tires a year. Make Buy Total relevant cost $ (a2) Ignoring qualitative factors, if the company needs 5,030 tires a year, should it continue to purchase them from Balyo or begin to produce them internally? The company to purchase the tires. Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 1 used |