Goldwater Company manufactures a part for its production cycle. The annual costs per unit for 10,000 units of the part are as follows: Direct materials $20.00 Direct labor 15.00 Variable factory overhead 16.00 Fixed factory overhead 10.00 Total costs $61.00 The fixed factory overhead costs are unavoidable. Olson Company has offered to sell 10,000 units of the same part to Goldwater Company for $60 per unit. The facilities currently used to make the part could be used to make 10,000 units per year of a new product that has a contribution margin of $20 per unit. No additional fixed costs would be incurred with the new product. Goldwater Company should ________. A) make the part to save $10,000 B) make the part to save $90,000 C) make the new product and buy the part to save $90,000 D) make the new product and buy the part to save $110,000 Exercise