Nelson Manufacturing Company can make 100 units of a necessary component part with the following costs:

Direct Materials	$126,000
Direct Labor	20,000
Variable Overhead	40,000
Fixed Overhead	20,000

If Nelson Manufacturing Company can purchase the component externally for $188,000 and only $4,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

Select one:

a. Make and save $2,000b. Buy and save $14,000c. Make and save $14,000d. Buy and save $2,000