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BCL Company produces bicycles. It currently produces 1,200 bicycles per year, operating at normal capacity,...

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BCL Company produces bicycles. It currently produces 1,200 bicycles per year, operating at normal capacity, which is 100% of full capacity. TRS has approached BCL offering to sell them the wheels for their bicycles at $130 each. The manufacturing cost per wheel is $50 for materials, $40 for direct labour , and $50 for fixed and variable overhead. If BCL buys the wheels they will free up 20% of their capacity. The $50 overhead applied to each wheel is based on normal capacity and includes a total allocation of $72,000 to help cover annual fixed overhead. The president of BCL has come to you for advice. "It costs me $140 to make the wheels," she says, "but only $ 130 to buy them. Should we continue making them or have | missed something?" Required: - What would be the change in the company's income if it were to buy the wheels? b. If BCL suddenly finds an opportunity to rent out the unused capacity of its factory for $ 80.000 per year, would your answer to part (a) change? Briefly explain and provide calculations Identify (3) qualitative factors (non-financial), that should be considered by BCL in this make versus-buy decision

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