Skye Company needs 20,000 parts to use in its production cycle. Steelers Inc. has offered to sell the parts to Skye for $44 per unit. However, 60% of Skyes fixed overhead would still continue regardless of the decision made. The costs for Skye to make the part (per unit) are:

Direct materials $12

Direct labour $26

Fixed overhead $10

In deciding whether to make or buy the part, Skyes total relevant (differential) costs to make the part are:

a) $840,000

b) $880,000

c) $960,000

d) $989,000

e) $760,000