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.

Suri Company has offered to sell 6,000 units of the same part to Cruise Company for $14 per unit. Assuming the company has no other use for its facilities, what should Cruise Company do?

A.

Buy from Suri and save $2 per unit.

B.

Make the part and save $6 per unit.

C.

Make the part and save $3 per unit.

D.

Make the part and save $10 per unit.