The One Wheel Company produces 130,000 wheels annually are unicycles. One Wheel currently manufactures each wheel that it uses in the production of its unicycles. The costs for One Wheel to manufacture Wheel c Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $26,000 539.000 $19.500 61000 one Wheel has been approached by an outside supplier, Round and Roung Corporation winch has offes red to sell One Wheel similar wheels for $0.80 per wheel. One Wheel has determined that if the wheels are purchased from the outside supplies $16,000 of annuel foed overhead could be avoided The facilities variable cost in its operations If One Wheel chooses to buy the wheel from the outside supplier, then annual net operating income would now being used by One Wheel to produce its own wheels could be rented out to another company for $42,500 per year One Wheel has determined that direct O increase by $3,500 O increase by $26,000 O increase by $39,000 O increase by $38,500