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Felt Bicycle Company has been manufacturing its own seats for its bicycles. The company is currently operating at 100% capacity. Normal production is 30,000 bicycles

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Felt Bicycle Company has been manufacturing its own seats for its bicycles. The company is currently operating at 100% capacity. Normal production is 30,000 bicycles per year. Direct Material $ 20 Direct Labor $30 Variable FOH $10 Fixed FOH $9 A supplier offers to make the bicycle seats at a price of $62 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but only $30,000 of fixed factory overhead currently being charged to the bicycle seats can be avoided. If the component part is purchased from the outside firm, Felt has the opportunity to rent out the space currently used to make the bicycle seat for $10,000 per year. Felt will make or buy (depending on your answer to the last question) BECAUSE Felt will save how many dollars

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