A company has the opportunity to outsource production of a part used in operations. The vendor has offered to sell them 3,500 units at $20/unit. To produce 3,500 units of the product, the following costs are incurred: Variable cost per unit $18.00/unit Fixed manufacturing overhead $13.50/unit Fixed selling & administrative $2.00/unit If the company outsources, all fixed S&A and $4.00 of fixed manufacturing overhead is avoidable. From a quantitative standpoint, should the company continue making the product or outsource, and how much would they save with their choice, assuming they need 3,500 units?

a Make; $14,000

b Outsource; $14,000

c Make; $40,250

d Outsource; $40,250