Gateway manufactures 21,000 computers per year. Demand is flat so its expected production levels to remain consistent year over year. The full manufacturing costs per computer are as follows:

Direct materials $ 500

Direct labor 100

Variable manufacturing overhead 58

Variable Selling & Administrative 2

Average fixed manufacturing overhead 26

Total $686

FoxCom offers Gateway to manufacture its computers at $650. If accepted, Gateway could eliminate production supervisor salaries that currently cost $2,000 per month. Gateway should

a. Buy the computers; the savings is $192,000

b. Make the computers; the savings is $234,000

c. Buy the computers; the savings is $234,000

d. Buy the computers; the savings is $210,000