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27 Terry Company incurs unit costs of $8 ( $5 variable and $3 fixed) in making an assembly part for its finished product. A supplier

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27

Terry Company incurs unit costs of $8 ( $5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,000 of the assembly part at $6 per unit. If the offer is accepted, Terry will save all variable costs but no fixed costs. Terry should A) buy the part, it is $10,000 less costly B) buy the part, it is $20,000 less costly C) make the part, it is $10,000 less costly D) make the part, it is $20,000 less costly E) none of the above

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