Business, 05.05.2020 13:49 davidcstro851

Talboe Company makes wheels which it uses in the production of children's wagons. Talboe's costs to produce 200,000 wheels annually are as follows:Direct material $40,000Direct labor 60,000Variable manufacturing overhead 30,000Fixed manufacturing overhead 70,000Total $200,000An outside supplier has offered to sell Talboe similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $25,000 of annual fixed manufacturing overhead would be avoided and the facilities now being used to make the wheels would be rented to another company for $55,000 per year. If Talboe chooses to buy the wheel from the outside supplier, then the change in annual net operating income is a:

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Talboe Company makes wheels which it uses in the production of children's wagons. Talboe's costs to...