Talboe Company makes wheels which it uses in the production of children's wagons. Talboe's costs to produce 90,000 wheels annually are as follows:

Direct material	$ 18,000
Direct labor	27,000
Variable manufacturing overhead	13,500
Fixed manufacturing overhead	57,000
Total	$115,500

An outside supplier has offered to sell Talboe similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $12,000 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 $32,100 per year.

What is the highest price that Talboe could pay the outside supplier for each wheel and still be economically indifferent between making or buying the wheels? (Round your answer to 2 decimal places.)

rev: 12_18_2013_QC_42475

$1.28

$1.14

$0.78

$1.09