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Big Bikes Co manufactures racing bikes. The company fabricates the wheels for their bikes but has been approached by Fast Wheels, Inc, to provide wheels
Big Bikes Co manufactures racing bikes. The company fabricates the wheels for their bikes but has been approached by Fast Wheels, Inc, to provide wheels to Big Bikes for $30 per wheel. Big Bike produces 5,000 wheels per year. The cost to produce wheels follows. Internal costs to produce wheels: Direct materials $15 Direct labor 10 Variable overhead 2 Fixed overhead 4 True or false, Big Bikes should outsource the wheels to Fast Wheels? True False
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