MANAGERIAL ACCOUNTING HANDOUT PROBLEM 10 Score Name Section Problem (10 points). Ohio Wheelies makes bicycles. Currently, the company makes all parts used in the manufacture of the bicycle. However, the company has been approached by Dayton Rearendent, Inc. about the possibility of Dayton Rearenders making the rear wheel assembly for the bicycles and selling them to Ohio Wheelies for $55 cach. The cost for Ohio Wheelies to make one of these rear wheel assembly parts is provided below OHIO WHEELIES COST DATA FOR MANUFACTURE OF REAR WHEEL ASSEMBLY PART Direct Materials Direct Labor 32.00 Variable Manufacturing Overhead 13.00 Fixed Manufacturing Overhead 8.50 Total Cost S 60.00 These production costs for Ohio Wheelies are based upon the normal annual production of 22,000 units. Ir Ohio Wheelies buys the rear wheel assemblies, it will save $57,000 per year in fixed manufacturing overhead. In addition, the company will be able to use the production facilities currently used to produce these assemblies to manufacture other bicycle accessories which will provide Ohio Wheelies with an additional $55,000 of contribution margin from operations with no additional fixed costs. REQUIRED: Prepare an analysis showing whether Ohio Wheelies should continue to make the rear wheel assembly part or whether it should purchase the part from Dayton Rearenders. Be sure to show all appropriate computations