no need to type just send handwritten do not have time.

SECTION B QUESTION 2 Wellness Inc. manufactures and sells motorised bicycles. Part 1 For the first nine months of 2021, Wellness used 80% of its production capacity. The information below relates to the nine months of operation. All bicycles produced were sold during the same period. Sales Cost of goods sold (including fixed cost of $90,000) Selling and admin. expenses (including fixed cost of $36,000) Net income Amount $450,000 315,000 108,000 $27,000 Per Unit $500.00 350.00 120.00 $30.00 Wellness just received a request from Burnaby Council to sell 200 bicycles at $450 for its Rent- a-bike program. Accepting the order would increase its variable selling and administrative expenses by $15.00 per unit because of shipping costs. Fixed administration costs also will increase by $6,000. Required (a) (2 marks) Show that the company has capacity to produce the special order. (b)(6 marks) Prepare an incr ental analysis for the special order using the we learnt in class. Should the special order be accepted? Part 2 Wellness has two divisions: Cycle and Motor. The Cycle division currently buys its motors from an outside supplier for $50. Management wants Cycle division to source the motors from Motor division for the special order of 200 bicycles from Burnaby Council. Currently Motor Division sells its motors to outside customers for $60 per unit. The variable cost for the motor is $25 per unit, which includes variable selling cost of $2 per unit. The fixed cost per unit is $14. Motor Division is operating at full capacity. If the internal transfer is made, Motor division can save the variable selling cost per unit. Required (a) (3 marks) Determine the minimum transfer price that Motor Division will accept. Will Cycle buy from Motor Division at this price? (b) (3 marks) The Cycle division is willing to pay $40 per unit for Motor division's motor. Calculate the potential loss (gain) to the company as a whole if Motor is forced to transfer the motors at the price Cycle is willing to pay