Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Jordan produces and sells only 7,900 bikes each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For example, Jordan could buy the handlebars for $37 each; they cost $40 each to make. The following is a detailed breakdown of current production costs. Item Unit Cost Total Unit-level costs Materials $ 17 $ 134,300 Labor 11 86,900 Overhead 3 23,700 Allocated facility-level costs 9 71,100 Total $ 40 $ 316,000 After seeing these figures, Jordan's president remarked that it would be foolish for the company to continue to produce the handlebars at $40 each when it can buy them for $37 each. Required:a. Calculate the total relevant cost per unit and total.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
In North Korea, a farmer's income is the same as a dentist's income. In a country with a mixed or market economy, the difference between those two professions might be more than 5 times different.
Answers (1)
When managers use a management information system, no management action is needed if?
Answers (1)
Define and discuss the four common denominators of all organizations, and provide an example for each component. What is the difference between an open and closed system? Provide an example for each system.
Answers (1)
Manufacturers sometimes offer a quantity discount to buyers on what kind of order? small large demand limited
Answers (1)
Risk vs. return reading quiz question 1 of 10: us savings bonds: a. are purchased for face value and pay interest above that amount b. are worth face value at maturity c. are risky investments
Answers (1)
New Questions in Business
The last stage of the new-product development process is
Answers (1)
Divided Fantastic Frames sells its frames for $15 per unit. Variable costs total $6 per unit, and fixed costs total $90,000. If Fantastic Frames increases sales by
Answers (1)
A trade show is usually focused on what? a. an employer b. an industry c. a school d. a craft
Answers (1)
The Harrisburg Store has net working capital of $2,715, net fixed assets of $22,407, sales of $31,350, and current liabilities of $3,908. How many dollars' worth of sales are generated from every $1 in total assets
Answers (1)
Select all maintenance procedures that may be performed in an office. update software replace printer cartridges clean copy machines install virus-protection software print copies to be distributed at a meeting
Answers (1)