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The maken means that KCSE assemblies and his all of its regular bicycles The buy means that KCSB pays another form to assemble and ship

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The maken means that KCSE assemblies and his all of its regular bicycles The "buy" means that KCSB pays another form to assemble and ship some of its regular bicycles and use the freed-up resources to make and sell specially racing bicycles TIP: The analysis can be simplified by onering all relevant tiems - the revenue and the costs for the bileydies that are not being s ourced. Instead, just focus on 1) the make versus buy costs of the outsourced bikes, and 2) the contribution margin of the specialty racing bikes. King City Specialty Bikes (CSB) produces high-end bicycles. Costs to manufacture and market the bicycles at last year's volume level of 2,200 bicycles per month are shown in the following table: Variable manufacturing per unit Totalved manulacturing Variable non manufacturing per unit Total wed nowmanufacturing $316,800 KOSB expects to produce and sell 2,400 bicycles per month in the coming year. The bicycles sell for $650 each An outside contractor makes an offer to assemble 700 of KCSO's bicycles per month and ship them directly to KCSO's customers as orders are received from its salesforce. It will charge Kaso $160 per bicycle KCSB would provide the materials for each bicyde, but the outside contractor would assemble, box, and ship the bicycles. If KCSB accepts the offers variable manufacturing costs would be reduced by 35% for the 700 bicycles assembled by the outside contractor, and its variable roman acturing costs for those 700 bicycles would be cut by 55. Indition, it would be able to save $15,290 of foed manufacturing costs fed nonmanufacturing costs would be unchanged. KCSO's marketing manager thinks that it could set 0 s alty.racing bicycles per month for $5,500 each, and its production manager thinks that it could use the idle resources to produce each of these bicycles for variable manufacturing costs of $4,300 per bicycle and variable non manufacturing costs of $450 per bicycle REQUIRED (Note: Round unit cost computations to the nearest cent] What is the difference in KCSB's monthly costs between accepting the proposal and rejecting the proposal? (Note: If the costs of acting the proposaress than the cost of reacting, enter the difference as a positive number if the accept costs are more than the reject costs, enter the operence as a negative number) TESTER

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