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McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 15,000 units

McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of

15,000

units of this part are as follows:

Direct materials

$85,000

Direct labor

127,000

Variable factory overhead

56,000

Fixed factory overhead

135,000

Total costs

$403,000

Of the fixed factory overhead costs,

$59,000

is avoidable. Conners Company has offered to sell

15,000

units of the same part to McMurphy Corporation for

$38

per unit.

Assuming there is no other use for the facilities, Schmidt should ________. (Round any intermediate calculations to the nearest dollar.)

A.

make the part, as this would save

$19

per unit

B.make the part, as this would save

$16

per unit

C.buy the part, as this would save

$19

per unit

D.

buy the part, as this would save the company

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