Company Planife manufactures Part G for use in its finished product. The unit cost to manufacture 30,000 units of Part G is as follows:

Raw materials: $4

Direct labour: $22

Variable manufacturing overhead: $8

Fixed overhead: $13

The unit fixed manufacturing overhead includes $5 specific to Part G. The remaining unit fixed manufacturing overhead is common to all products manufactured by the company and is charged to the manufacturing cost of G.

Verona Company has offered to sell Planife the 30,000 units of Part G for $46 per unit. If Planife accepts Verona's offer, the freed-up facilities can be used to save $220,000 in relevant costs in manufacturing Part G. Choose the correct answer:

Question 17 options:

a) If purchased: loss of $190,000

b) If manufactured: $250,000 loss c) If manufactured: $430,000 gain

d) No answer is appropriate

e) If purchased: $10,000 loss