Help Save & Ex Exercise 6-10A Outsourcing decision LO 6-3 Vernon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are racing bikes with limited sales. Vernon produces and sells only 7.200 bikes each year. Due to the low volume of activity, Vemon is unable to obtain the economies of scale that larger producers they cost $36 each to make. The following is a detailed breakdown of current production costs: achieve. For example, Vernon could buy the handlebars for $33 each Unit-level costs $14 Labor Overhead $100, 800 57,600 14,400 Allocated facility-level costs $36 $259,200 After seeing these figures, Vernon's president remarked that it would be foolish for the company to continue to produce the handlebars at $36 each when it can buy them for $33 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Total r Do you sgre with Prev 7 of 10Next 8