Vernon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high quality racing bikes with limited sales. Vernon produces and sells only 7,000 bikes each year. Due to the low volume of activit Vernon is unable to obtain the economies of scale that larger producers achieve. For example, Vernon could buy the handlebars for $32 each; they cost $35 each to make. The following is a detailed breakdown of current production costs. Item Unit Cost Total Unit-level costs Materials $13 $ 91,000 Labor 9 63,000 Overhead 3 21,000 Allocated facility-level costs Total 10 70,000 $35 $245,000 After seeing these figures, Vernon's president remarked that it would be foolish for the company to continue to produce the handlebars at $35 each when it can buy them for $32 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Total relevant cost Per Unit Total After seeing these figures, Vernon's president remarked that it would be foolish for handlebars at $35 each when it can buy them for $32 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Per Unit Total Total relevant cost Do you agree with the president's conclusion