Carter, Inc. can make 100 units of a necessary component part with the following costs:

Direct Materials $120,000

Direct Labor 20,000

Variable Overhead 60,000

Fixed Overhead 40,000

If Carter can purchase the component externally for $220,000 and only $10,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

	A	Make and save $10,000
B		Buy and save $10,000
C		Make and save $30,000
D		Make and save $10,00

A budget

A		is a substitute for management.
b		is an aid to management.
C		can operate or enforce itself.
D		is the responsibility of the accounting department.