Sweets Co. Sweets Co. makes wheels for use in the production of a children's ice cream truck toy. The cost for Sweets to produce 220,000 wheels annually are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total $0.20 0.40 0.10 0.30 $1.00 An outside supplier has offered to sell Sweets similar wheels for $0.90 per wheel. If the wheels are purchased from the outside supplier, $27,000 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 $70,000 per year. If Sweets choose: to buy the wheel from the outside supplier, how would that affect the company's annual net operating income?

Sweets Co. Sweets Co. makes wheels for use in the production of a children's ice cream truck toy. The cost for Sweets to produce 220,000 wheels annually are as follows: An outside supplier has offered to sell Sweets similar wheels for $0.90 per wheel. If the wheels are purchasec from the outside supplier, $27,000 of annual fixed manufacturing overhead would be avoided and the facilitie now being used to make the wheels would be rented to another company for $70,000 per year. If Sweets choose to buy the wheel from the outside supplier, how would that affect the company's annual net operating income