Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 2,000 units):

Direct materials	$	25
Direct labor		55
Variable overhead		23
Fixed overhead		48
Total	$	151

Trailblazers offered to sell the assembly to Mobility for $110 each. The total order would amount to 2,000 rear wheel assemblies per year, which Mobility's management will buy instead of make if Mobility can save at least $20,000 per year. Accepting Trailblazers's offer would eliminate annual fixed overhead of $41,300.

Required:
a.	Prepare a schedule that shows the differential costs on the 2,000 rear wheel assemblies order. Status Quo Alternative Difference Trailblazer's Offer Materials Labor Variable Overhead Fixed Overhead Applied Total Costs

b.

Should Mobility make rear wheel assemblies or buy them from Trailblazers?

	Buy
	Make