Rockford Company manufactures lanterns for use in its production ornamental outdoor lighting. The unit costs for 10,000 lanterns are listed below. Angel Company has offered to sell to Rockford Company 10,000 lantern filaments for $8.00 per unit. The plant facilities could be rented to another manufacturer for $9,000 if Rockford accepts the offer. In addition, $10,000 of fixed manufacturing overhead would be eliminated. Which alternative is best for Rockford Company? What would be the effect on income?

Data
Units	10000
Purchase price	$ 8.00
Savings in space	$ 9,000.00
Direct materials	$ 0.75
Direct mfg. labor	$ 3.00
Variable overhead	$ 1.50
Fixed overhead saved	$ 10,000.00

Group of answer choices

Buy $11,500

Make $3,750

Make $8,500

Buy $5,250