Requirement 1. (a) What is the average cost of manufacturing a bicycle frame in 2023? How does it compare to Ryan's offer? The average cost of $ per frame is than Ryan's offer. (b) Can Gonzalez use the answer in requirement 1a to determine the cost of manufacturing 33,000 bicycle frames? Explain. Gonzalez take the average manufacturing cost in 2023 to determine the total cost of manufacturing 33,000 bicycle frames. The reason is that Requirement 2. Gonzalez's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the bicycle frame as the dependent variable and bicycle frames produced as the independent variable: y = $435,000+ $10X During the years used to estimate the regression equation, the production of bicycle frames varied from 29,000 to 33,000. Using this equation, estimate how much it would cost Gonzalez to manufacture 33,000 bicycle frames. How much more or less costly is it to manufacture the frames rather than to acquire them from Ryan? Estimated cost to make the frames Cost to purchase the frames It will cost $ $ $ to purchase the frames rather than manufacture them in-house.

Requirement 1. (a) What is the average cost of manufacturing a bicycle frame in 2023? How does it compare to Ryan's offer? The average cost of $ per frame is than Ryan's offer. (b) Can Gonzalez use the answer in requirement 1a to determine the cost of manufacturing 33,000 bicycle frames? Explain. Gonzalez take the average manufacturing cost in 2023 to determine the total cost of manufacturing 33,000 bicycle frames. The reason is that Requirement 2. Gonzalez's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the bicycle frame as the dependent variable and bicycle frames produced as the independent variable: y = $435,000+ $10X During the years used to estimate the regression equation, the production of bicycle frames varied from 29,000 to 33,000. Using this equation, estimate how much it would cost Gonzalez to manufacture 33,000 bicycle frames. How much more or less costly is it to manufacture the frames rather than to acquire them from Ryan? Estimated cost to make the frames Cost to purchase the frames It will cost $ $ $ to purchase the frames rather than manufacture them in-house.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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