8.9 (L0 3) Outsourcing Elroy Racers makes bicycles. It has always purchased its bicycle tires from the M. Wilson Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials $8 Direct labor $ 5 Variable manufacturing overhead $7 The company's fixed expenses would increase by $60,000 per year if managers decided to make the tire. Required a. Ignoring qualitative factors, if the company needs 10,000 tires a year, should it continue to purchase them from M. Wilson or begin to produce them internally? b. What qualitative factors should Elroy Racers consider in making this decision