Saved Help Save & Exit Submit 2 King City bpecialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2,000 units per month are shown in the following table. Check my work Unit manufacturing costs Variable costs Fixed overhead Total unit manufacturing costs Unit nonmanufacturing costs Variable 3.33 points $240 120 $360 60 140 Fixed ook Total unit nonmanufacturing costs 200 Total unit costs $560 Print The company has the capacity to produce 2,000 units per month and always operates at full capacity. The bicycles sell for $600 per unit. References Required: a. KCSB receives a proposal from an outside contractor who will assemble 800 of the 2,000 bicycles per month and ship them directly to KCSB's customers as orders are received from KCSB's sales force. KCSB would provide the materials for each bicycle, but the outside contractor would assemble, box, and ship the bicycles. The variable manufacturing costs would be reduced by 40 percent

wanie reguiar bicycles? b-2. Should the contractor's proposal of $140 per unit be accepted? WELRODUSU be wil eBook Complete this question by entering your answers in the tabs below. Print Reg A1 Reg A2 Reg 1 Req B2 References Assume the same facts as in requirement (a) but assume that the idle facilities would be used to produce 80 specialty racing bicycles per month. These racing bicycles could be sold for $8,000 each, while the costs of production would be $5,600 per unit variable manufacturing cost. Variable marketing costs would be $200 per unit. Fixed nonmanufacturing and manufacturing costs would be unchanged whether the original 2,000 regular bicycles were manufactured or the mix of 1,200 regular bicycles plus 80 racing bicycles was produced. 11. Considering this opportunity to use the freed-up space, what is the maximum purchase price per unit that KCSB should be willing to pay the outside contractor to assemble regular bicycles? Show less Maximum Price