2. Bonneville Company is producing a subassembly used in the production of a product. The costs incurred for the subassembly follow:

Per Unit

Direct materials$6.00

Direct labor4.00

Variable factory overhead1.00

Fixed supervisor salary3.00

Depreciation expense on factory equipment2.00

General fixed factory overhead allocated5.00

Total costs$21.00

The above per unit costs are based on 8,000 units. An outside supplier will provide 8,000 subassemblies for $19 per unit. The supervisor will be terminated if the subassemblies are not produced in house. The idle factory will be used to manufacture another product with a contribution margin of $60,000. What should Bonneville do?

A) make the subassemblies and save $20,000

B) make the subassemblies and save $40,000

C) buy the subassemblies and save $20,000

D) buy the subassemblies and save $40,000