Ridez Manufacturing currently produces 4,000 bicycles per month.The following per unit data apply for sales to regular customers:

The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles.What is the per unit cost of producing 5,000 bicycles?
A)$91.80 per unit
B)$111.25 per unit
C)$69.80 per unit
D)$86.20 per unit

Question

Ridez Manufacturing currently produces 4,000 bicycles per month.The following per unit data apply for sales to regular customers:

The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles.What is the per unit cost of producing 5,000 bicycles?
A)$91.80 per unit 
B)$111.25 per unit 
C)$69.80 per unit 
D)$86.20 per unit

Quizplus · Accepted Answer

Cost of producing 5,000 bicycles = [($53 + $10 + $12 )× 5,000 units] + ($14 × 4,000 units)= 375,000 ÷ 5,000 units = $86.20

Ridez Manufacturing Currently Produces 4,000 Bicycles Per Month