5. The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 100,000 wheels annualy are: materials 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 fxed 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. At what purchase price for the wheels would Talbot be indifflerent between making or buying the wheels? a. $1.70 per wheel b. $1.55 per wheel c$1.15per wheel d. $1.60 per wheel Use the folowing information to answer questions 610 Answer each question independently unless ing Company manufactures two products called Red and Gold that sell for $155 and $115, respectively. The company has the capacity to annualy produce 80,000 units of each product. Its unit cost for each product at this level of activity are given below Traceable FMIOH Traceable FMOH are direct costs of each product line. Common faxed expenses have been allocated to the product based on sales dollars. The direct labor rate of $12 per hour is expected to remain unchanged theoughout the year 6. Assume King expects to produce and sell 75,000 Golds during the current year. One of Kngs sales representatives has found an additional customer wiling to buy 8.000 addeional Gold for a price of $100 per unit. If King accepts this customers offer, how much will its profis $145,000 b $ 24,000 . 5304,000 d. $384,000 7. Assume King normally produces and sells 70,000 Reds per year. If King discontinues the Red product line, how much will profits increase or decrease? b 154,700,000) c. I$1530,000) d ($3,370,000) 8 Assume that King expects to produce and sell 60,000 Golds for the year. A supplier has offered to mandacture and deliver 60,000 Galds to K ng for a price of $83 per unit lf.ng buys the 60,000 Golds from the supplier instead of making those units, the company willbe 8. supplier has Assume that King expects to produce and sell 60,000 Golds for the year. A offered to m anufacture and deliver 60,000 Golds to King for a price of $83 per unit IfErg able to buys the 60,000 Golds from the supplier instead of making those units, the company wil be profes increase or decrease? Assume traceable fixed costs are avoidable the space o another manufacturer for $300,000 this year How much will C d. ($360,000) $540,000