ote$-$ In addition to typical avoid cost please note that the supervisor is also specifically hired to supervise the coduction of wheels, and avoidable if wheels are bought from outside.

n outside supplier has offered to sell $16,000$ wheels a year to Toronto Cycles for a price of $$38$ each, or a tal of $$608,000(=16,000$ wheels $$$$38$ each$).$

ipecial equipment's used in production was bought $5$ years back and do not have any resale value low.

Requirement:

Should the company stop producing the wheels internally and buy them from the outside supplier?

$12$ points

The company's cost of making the wheels internally for $16,000$ units is $$448,000\mathrm{.}00,$ considering relevant $($avoidable$)$ costs only.

True

False