Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,000 units, are as follows:

Direct materials

$4.00

Direct labor

$4.00

Variable manufacturing overhead

$3.00

Fixed manufacturing overhead

$1.00

Total cost

$12.00

The fixed overhead costs are unavoidable.

6. Assuming Cruise Company can purchase 6,000 units of the part from Suri Company for $14 each, and the facilities currently used to make the part could be rented out to another manufacturer for $24,000 a year, what should Cruise Company do?

a. Make the part and save $6.00 per unit.

b. Make the part and save $2.00 per unit.

c. Buy the part and save $2.00 per unit.

d. Buy the part and save $1.00 per unit.