Great Products Company currently outsources a relay switch that is a component in one of its products. The switches cost $37 each. The company is considering making the switches internally at the following projected annual production costs:

Unit-level material cost	$6
Unit-level labor cost	$5
Unit-level overhead	$4
Batch-level set-up cost (6,000 units per batch)	$48,000
Product-level supervisory salaries	$49,000
Allocated facility-level costs	$43,000

The company expects an annual need for 6,000 switches. If the company makes the product, it will have to utilize factory space currently being leased to another company for $3,800 a month. If the company decides to make the parts, total costs will be:

a. $43,000 less than if the switches are purchased.

b. $53,600 more than if the switches are purchased.

c. $10,600 more than if the switches are purchased.

d. $38,400 less than if the switches are purchased.