TB MC Qu. 07-109 The Talbot Corporation makes wheels that it... The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 130,000 wheels annually are: $26,000 Direct materials $39,000 Direct labor Variable manufacturing overhead $19.500 $61,000 Fixed manufacturing overhead An outside supplier has offered to sell Talbot similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $16,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $42,500 per year. Direct labor is a variable cost. At what purchase price for the wheels would Talbot be indifferent between making or buying the wheels? (Round your answer to 2 decimal places.) Direct materials $26.000 $39,000 Direct labor $19.500 Variable manufacturing overhead Fixed manufacturing overhead $61,000 An outside supplier has offered to sell Talbot similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $16,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $42,500 per year. Direct labor is a variable cost. At what purchase price for the wheels would Talbot be indifferent between making or buying the wheels? (Round your answer to 2 decimal places.) $1.12 $1.05 $110 $0.77