Diamond Brands manufactures rice, wheat, and oat cereals. Sanders Company has approached Diamond Brands with a proposal to sell the company the rice cereals at a price of $22,000 for 20,000 pounds. The following costs are associated with production of 20,000 pounds of rice cereal:

Direct material $13,000

Direct labor 5,000

Manufacturing overhead 7,000

Total $25,000

The manufacturing overhead consists of $5,000 of variable costs with the balance being allocated to fixed costs. What is the amount of avoidable costs if Diamond Brands buys rather than makes the rice cereal?

a) 25,000

b) $23,000

c) $21,000

d) $20,000

e) $22,000