Sheffield Corp., Inc. can produce 100 units of a component part with the following costs: Direct Materials $17500 Direct Labor 12000 Variable Overhead 17000 Fixed Overhead 14500 If Sheffield Corp., Inc. can purchase the component part externally for $54000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

Buy and save $7500

Make and save $3000

Buy and save $3000

Make and save $3500