Sheridan Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of...
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Sheridan Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bike is as follows. The unassembled bikes are sold to retailers at $501 each. Sheridan has unused productive capacity that is expected to continue indefinitely; management has concluded that some of this capacity could be used to assemble the bikes and sell them at $539 each. Assembling the bikes will increase direct materials by $5 per bike and direct labor by $10 per bike. Additional variable overhead will be incurred at the normal rates, but there will be no additional fixed overhead as a result of assembling the bikes. Prepare an incremental analysis for the sell-or-process-further decision. (Enter negative amounts using either a negative sign preceding the number e.g. 45 or parentheses e.g. (45). Do not leave any field blank. Enter 0 for the amounts.) Should Sheridan sell or process further
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