3) Blue Ridge Bicycles uses a standard part in the manufacture of several of its...
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3) Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of 3) producing 42,000 parts is $142,000, which includes fixed costs of $68,000 and variable costs of $74,000. The company can buy the part from an outside supplier for $4.00 per unit, and avoid 30% of the fixed costs. If Blue Ridge Bicycles makes the part, how much will its operating income be? A) 588,400 less than if the company bought the part B) $88,400 greater than if the company bought the part C) $73,600 less than if the company bought the part D) $73,600 greater than if the company bought the part
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