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Campbell Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are...

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Accounting

Campbell Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high- quality racing bikes with limited sales. Campbell produces and sells only 6,300 bikes each year. Due to the low volume of activity, Campbell is unable to obtain the economies of scale that larger producers achieve. For example, Campbell could buy the handlebars for $36 each; they cost $39 each to make. The following is a detailed breakdown of current production costs. Item Unit-level costs Unit Cost Total Materials Labor Overhead $16 $100,800 9 56,700 2 12,600 Allocated facility-level costs. 12 75,600 $39 $245,700 Total After seeing these figures, Campbell's president remarked that it would be foolish for the company to continue to produce the handlebars at $39 each when it can buy them for $36 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Per Unit Total Total relevant cost Do you agree with the president's conclusion

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