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

Direct materials	$8
Direct labor	2
Variable overhead	1
Fixed overhead	4

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

Now suppose that ColorPro discovers that other costs will increase by $7,000 per year if the component is purchased rather than made internally.

Should ColorPro make or buy the part?

Select one:

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

b. Make the part because it will save $107,000 over buying it.

c. Make the part because it will save $10,000 over buying it.

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

e. Buy the part because it will save $107,000 over making it.