ses/200717/quizzes/390712/take/questions/6060055 D Question 28 You started this quiz near when it was due, so you won't have the full amount of time to take the quiz. 67 pts x Cathy Company makes wheels that it uses in the production of children's wagons. Cathy's costs to produce 200.000 wheels annually are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total $40,000 60,000 30.000 20.000 $200,000 Cathy has received an offer from an outside supplier who is willing to provide the 200,000 wheels each year at a price of $0.80 per wheel. If the wheels are purchased from the outside supplier, $30,000 of annual fixed manufacturing overhead would be avoided, and the facilities now being used to make the wheels would be rented to another company for $80,000 per year. If Cathy chooses to buy the wheels from the outside supplier, then the change in annual net operating income is a: O $70,000 increase SO change $40,000 increase $80,000 increase O $120,000 increase