Connect Google Translate xG Talboe Company makes i x ? -> cia secure! https://ne

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Connect Google Translate xG Talboe Company makes i x ? -> cia secure! https://newconnect.mheducation.com/flow/connect.html Quiz 6 -Chapter 1land 12 Saved 10Deer com Talboe Company makes wheels which t uses in the production of children's wagons. Talboe's costs to produce 200,000 wheels annually are as follows $40,000 60,000 Direct labor Variable manufacturing overhead30,000 Fixed manufacturing overhead70000 010112)Total $200000 An 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 wou 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 Multiple Choice $70.000 increase $40,000 increase $5,000 increase $5,000 decrease K Prey 10 of 10Next

Explanation / Answer

Talboe Company Make Total Buy Cost Element Per Unit Direct Material $ 40,000.00 Direct Labor $ 60,000.00 Variable Factory Overhead $ 30,000.00 $ 130,000.00 Purchase Price=(200000*.08) $ 160,000.00 Less: Saving of fixed cost $ (25,000.00) Less: Rented out facility $ (55,000.00) $ 130,000.00 $    80,000.00 Increase in Net Income=($130000-$80000)=$50,000

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