A company makes a key part for one of its main products. The variable cost of making this part is $ 3.40 per unit and the incremental overhead is $ 1.75 per unit. The company can purchase this part for $ 4.75 per unit. The selling price of the main product is $ 9.15 per unit. Should the company make or buy the part?

Multiple Choice

• Buy the cost to make is $ 9.15; the cost to buy is $ 4.75.

• Make the cost to make is $ 3.40; the cost to buy is $ 4.75.

• Make the cost to make is $ 3.40; the cost to buy is $ 9.15.

• Buy the cost to make is $ 5.15; the cost to buy is $ 4.75.

• Buy the cost to make is $ 9.90; the cost to buy is $ 1.75.