Schmidt 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 $45,000 Direct labour 45,000 Variable factory overhead 30,000

Fixed factory overhead 70,000 Total costs $190,000 Of the fixed factory overhead costs, $30,000 is not avoidable. 2. Phil Company has offered to sell 10,000 units of the same part to Schmidt Corporation for $13 per unit. Assuming there is no other use for the facilities, Schmidt should a. make the part, as this would save $3 per unit. b. buy the part, as this would save $3 per unit. c. make the part, as this would save $4 per unit. d. make the part, as this would save $2 per unit. e. buy the part, as this would save $4 per unit.