Problem 5 (Textbook Reference: P6-6Decide whether to make or buy a product Skate-Right Company, a skateboard manufacturer, is currently operating at 60% capacity and producing about 8,000 units that the company manufacture its own wheels. Curmeanty the company purchases whels from supplicr t s unt prioachoard) Estimates show the company can manufacture its own wheels at $10 for direct materials costs and $4 for direct labor cost per unit. The variable factory overhead is S1 per unit. The company's accountants would probably allocate another $6 per unit to the wheels. a. Should Skate-Right make or buy the wheels? SKATE RIGHT COMPANY Relevant Revenues and Expenses Buy Make Differe ntial Purchase cost Direct materials Direct labor Factory overhead Net advantage (disadvantage) of making wheels WHEELS: MAKE OR BUY (circle your answer) Suppose Skate-Right could rent out the factory space needed to make the wheels for $360,000 annually. How would this affect your decision in (a), if at all? b