Question: Please answer in the format in the photo!!!!!!!!!!! Ivanhoe Bicycle Company manufactures its own seats for its bicycles. The company is currently operating at 100%

Please answer in the format in the photo!!!!!!!!!!!
Ivanhoe Bicycle Company manufactures its own seats for its bicycles. The company

Ivanhoe Bicycle Company manufactures its own seats for its bicycles. The company is currently operating at 100% capacity. Variable manufacturing overhead i5 charged to production at the rate of 60% of direct labor cost The direct materials and direct Jabor cost per unit to make the bicycle seats are $8 and $9, respectively. Normal production is 54,000 bicycles per year Asupplier offers to make the bicycle seats at a price of $21 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $32,400 of fixed manufacturing overhead currently being charged to the bicycle seats will have to be absorbed by other products. Prepare the incremental analysis for the decision to make or buy the bicycle seats. (Enter negative amounts usrgeithera rtive sign preceding the number eg. -45 or parentheses e.g. (45). Do not leave any field blank Enter O for the amounts.) Make Buy Net Income Increase (Decrea Direct Labor Opportunity cost Variable Manufacturing Costs PurchasePrice Fixed Manufacturing Costs Total annual cost Direct Materiel Save for Later s Attempts: O of 1 used

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!