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Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 1,800 units):

Direct materials$30

Direct labor105

Variable overhead17

Fixed overhead43

Total$195

Trailblazers has offered to sell the assembly to Mobility for $161 each. The total order would amount to 1,800 rear wheel assemblies per year, which Mobility's management will buy instead of make if Mobility can save at least $20,000 per year. Accepting Trailblazers's offer would eliminate annual fixed overhead of $36,750.

a.create a schedule that shows the total differential costs.(Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.)

trainblazers' offer statu quo alternative difference

materials xx xx xx higher/lower/none

labor xx x x x x higher/lower/none

variable overhead x x x x x x higher/lower/none

fixed overhead applied x x x x x x higher/lower/none

total costs x x x x x x higher/lower/none

b.Should Mobility make rear wheel assemblies or buy them from Trailblazers?

Buy/Make?

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