Business, 30.06.2019 00:20 KindaSmartPersonn

The talbot corporation makes wheels that it uses in the production of bicycles. talbot's costs to produce 100,000 wheels annually are: direct materials $30,000 direct labor $50,000 variable manufacturing overhead $20,000 fixed manufacturing overhead $70,000 an outside supplier has offered to sell talbot similar wheels for $1.25 per wheel. if the wheels are purchased from the outside supplier, $15,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $45,000 per year. direct labor is a variable cost. if talbot chooses to buy the wheel from the outside supplier, then annual net operating income would:
a) $1.70
b) $1.60
c) $1.55
d) $1.15

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The talbot corporation makes wheels that it uses in the production of bicycles. talbot's costs to pr...

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