The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 100,000 wheels annually are: Direct materials $30,000 Direct labor $50,000 Variable manufacturing overhead $20,000 Fixed manufacturing overhead $70,000 An outside supplier has offered to sell Talbot similar wheels for $1.25 per wheel. If the wheels are purchased from the outside supplier, $15,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $45,000 per year. Direct labor is a variable cost. If Talbot chooses to buy the wheel from the outside supplier, then annual net operatingincome would: A. Increase by $35,000 B. Decrease by $10,000 C. Increase by $45,000 D. Increase by $70,000

Increase in net annual operating income  $35,000

Explanation:  

                                                                                                    $

Variable cost of internal production

(30,000+50,000 + 20,000)                                                    100,000

Variable cost of purchase  (1.25× 100,000)                           125,000

Extra variable cost of buying                                                  ( 25,000)

Add savings in fixed cost from                                                15,000

Add rent from facilities                                                            45,000

Increase in net annual operating income                              35,000

Increase in net annual operating income  $35,000

The balance of the the fixed  cost is not relevant hence it was  not considered. This is so because whatever decision is taken, it would be incurred either way

well based on 99% of parents have dont something wrong to there kids mabey even stole money from you so based on maney inccedent i would choose guilt

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy