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• The fixed cost to restart production is $62000000 per model. Once production starts the variable...

• The fixed cost to restart production is $62000000 per model. Once production starts the variable cost to make each bicycle is 35100 per bike. The firm’s management is trying to decide if the firm should only concentrate on the domestic (Australian) market (Estimated 725 of bicycles per model), or pursue export opportunities (Estimated combined 1890 of bicycles per model) Calculate the total cost per bicycle for the two (2) options. Which of the two (2) options do you recommend? Why?

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