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

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Fanning Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales Fanning produces and sells only 7.600 bikes each year. Due to the low volume of activity, Fanning is unable to obtain the economies of scale that larger producers achieve. For example Fanning 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 $15 $114,000 Labor 62,800 Overhead 22,800 Allocated facility-level costs 106,400 Total $40 $384,00 8 3 14 After seeing these figures, Fanning'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 Calculate the total relevant cost. Do you agree with the president's conclusion? Total Per Unit Total relevant cost Do you agree with the president's conclusion

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