A company plans to sell 12,000 units of product XT and 8,000 units of product RP. The company has a capacity of 12,000 productive machine hours. The unit cost structure and machine hours required for each product are as follows:

Unit costs:	XT		RP
Materials	$37		$24
Direct labor	12		13
Variable overhead	6		3
Fixed overhead	37		38
Machine hours required	1.0		1.5

The company can purchase 12,000 units of XT at $60 and/or 8,000 units of RP at $45. Based on the above, which one of the following actions should be recommended to the companys management?

A.Produce XT internally and purchase RP.

B.Produce RP internally and purchase XT.

C.Purchase both XT and RP.

D.Produce both XT and RP.