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The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs...

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Accounting

The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 140,000 wheels annually are:

Direct materials $28,000
Direct labor $42,000
Variable manufacturing overhead $21,000
Fixed manufacturing overhead $62,000

An outside supplier has offered to sell Talbot similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $17,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $44,600 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.)

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