McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows:

Direct materials $86,000

Direct labor 126,000

Variable factory overhead 58,000

Fixed factory overhead 138,000

Total costs $408,000

Of the fixed factory overhead costs, $55,000 is avoidable. Conners Company has offered to sell 12,000 units of the same part to McMurphy Corporation for $41 per unit.

Assuming there is no other use for the facilities, Schmidt should ________.

make the part, as this would save $16 per unit

make the part, as this would save $14 per unit

buy the part, as this would save $16 per unit

buy the part, as this would save $14 per unit