One of the computer manufacturers is studying manufacturing 20,000 transistors through the unused capacity for their machines. They expect the following costs to be incurred: $40,000 direct material, $100,000 direct labor, $40,000 Indirect material, $40,000 machines depreciation, and $25,000 building depreciation. The company has an offer to purchase the transistor at $8 from an external supplier. The company should:

[[selectone]]

a. Purchase the transistors from the external supplier

b. Manufacture the transistor internally

c. Both alternatives will give similar results

d. We cannot determine