Great Products Company currently outsources a relay switch that is a component in one of its products. The switches cost $40 each. The company is considering making the switches internally at the following projected annual production costs:

Unit-level material cost	$8
Unit-level labor cost	$7
Unit-level overhead	$6
Batch-level set-up cost (4,000 units per batch)	$30,000
Product-level supervisory salaries	$40,000
Allocated facility-level costs	$25,000

The company expects an annual need for 4,000 switches. If the company makes the product, it will have to utilize factory space currently being leased to another company for $2,000 a month. If the company decides to make the parts, total costs will be which choice below:?

• $25,000 less than if the switches are purchased.

• $43,000 more than if the switches are purchased.

• $22,000 less than if the switches are purchased.

• $18,000 more than if the switches are purchased.