Piels Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:

Direct materials	$ 90,000
Direct labor	130,000
Variable factory overhead	60,000
Fixed factory overhead	140,000
Total costs	$420,000

Of the fixed factory overhead costs, $60,000 is avoidable. Conners Company has offered to sell 10,000 units of the same part to Piels Corporation for $36 per unit. Assuming there is no other use for the facilities, Schmidt should ________.

Select one:

a.

buy the part, as this would save the company $60,000

b.

make the part, as this would save $20,000

c.

make the part, as this would save $60,000

d.

buy the part, as this would save $6 per unit