Problem 6-27A Outsourcing decision affected by equipment replacement CHECK FIGURES Sturdy Bike Company makes the frames used to build its bicycles. During 2018, Sturdy made 20,000 frames; the costs incurred follow: a. Avoidable cost per unit: $106.10 b. Avoidable cost per unit with new equipment: $27.50 Unit-level materials costs (20,000 unitsx $35.00) Unit-level labor costs (20,000 units $42.50) Unit-level overhead costs (20,000 $10.00) Depreciation on manufacturing equipment Bike frame production supervisor's salary Inventory holding costs Allocated portion of facility-level costs Total costs $ 700,000 850,000 200,000 20,000 70,000 290,000 500,000 $2,730,000 Sturdy has an opportunity to purchase frames for $92.50 each