Carla Vista Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of...

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Carla Vista Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bike is as follows. Direct materials $177 80 Direct labor Variable overhead (70% of direct labor) 56 Fixed overhead (30% of direct labor) 24 Manufacturing cost per unit $337 The unassembled bikes are sold to retailers at $511 each. Carla Vista 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 $551 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 fixed overhead as a result of assembling the bikes. Should Carla Vista sell or process further? Carla Vista Bikes should i Sell Further (Decrease) $ Carla Vista Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bike is as follows. Direct materials $177 80 Direct labor Variable overhead (70% of direct labor) 56 Fixed overhead (30% of direct labor) 24 Manufacturing cost per unit $337 The unassembled bikes are sold to retailers at $511 each. Carla Vista 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 $551 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 fixed overhead as a result of assembling the bikes. Should Carla Vista sell or process further? Carla Vista Bikes should i Sell Further (Decrease) $

Answer rating: 100% (QA)

Q1 Inventory Calculation 1 Calculation of the number and cost of goods available for sale Inventory Beginning Units 3000 Unit Cost 8 Total Cost 3000 units 8 24000 Purchases March 5 Units 9500 Unit Cos... View the full answer