Ortiz Co. produces 5,000 units of part A12E. The following costs were incurred for that level of production:

Direct materials $ 55,000

Direct labor 160,000

Variable overhead 75,000

Fixed overhead 175,000

An outside vendor has offered to make the part and sell it to Ortiz for $70 per unit. Ortiz is deciding whether to make or buy the part. If Ortiz buys the part from an outside supplier, fixed overhead will not change and all of the fixed overhead will be allocated to other parts manufactured by Ortiz.

After completing the make or buy analysis, Ortiz found that:

Group of answer choices

it would be $23 per unit cheaper to buy the part than to make it.

it would be $15 per unit cheaper to buy the part than to make it.

it would be $12 per unit more expensive to buy the part than to make it.

it would be $4 per unit more expensive to buy the part than to make it.