ColorPro uses part $87$A in the production of color printers. Unit manufacturing costs for part $87$A are:

Direct materials

$$8$

Direct labor

$2$

Variable overhead

$1$

Fixed overhead

$4$

ColorPro uses $100,000$ units of $87$A per year. Filbert Company has offered to sell ColorPro $100,000$ units of $87$A per year for $$12.$ Fixed overhead is unavoidable.

Refer to Figure $13-2.$ Should ColorPro make or buy the part?

Make the part because it will save $$100,000$ over buying it$.$

Buy the part because it will save $$100,000$ over making it$.$

Make the part because it will save $$1,100,000$ over buying it$.$

Buy the part because it will save $1,100,000$ over making it$.$

Buy the part because it will save $$300,000$ over making it$.$