#15

Super Security Company manufacturers home alarms. Currently it is manufacturing one of its components at a variable cost of $45 and fixed costs of $15 per unit. An outside provider of this component has offered to sell Safe Security the component for $50. Determine the best plan and calculate the savings.

a. $5 savings per unit - Purchase

b. $5 savings per unit - Manufacture

c. $10 savings per unit - Manufacture

d. $15 savings per unit - Purchase