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Sunland Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bike is as follows. Direct materials Direct labor
Sunland Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bike is as follows. Direct materials Direct labor $174 80 Variable overhead (70% of direct labor) 56 Fixed overhead (30% of direct labor) 24 Manufacturing cost per unit $334 The unassembled bikes are sold to retailers at $506 each Sunland has unused productive capacity that is expected to continue indefinitely, management has concluded that some of this capacity could be used to assemble the bikes and sell them at $545 each. Assembling the bikes will increase direct materials by $5 per bike and direct labor by $10 per bike. Additional variable overhead will be incurred at the normal rates, but there will be no additional floxed overhead as a result of assembling the bikes. (a) Prepare an incremental analysis for the sell-or-process-further decision. (Enter negative amounts using either a negative sign preceding the number eg-45 or parentheses eg (45). Do not leave any field blank. Enter O for the amounts) > Sell Process Further Net Income Increase (Decrease) (a) Prepare an incremental analysis for the sell-or-process-further decision. (Enter negative pounts using either a negative sign preceding the number eg. -45 or parentheses eg. (45). Do not leave any field blank. Enter O for the amounts.) Save for Later > Sell Process Further $ Net Income Increase (Decrease) Attempts: 0 of 1 used Submit Answer The parts of this question must be completed in order. This part will be available when you complete the part above. (b)
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