Smith Company manufactures widgets. Acme Company has approached Smith with a proposal to sell the company one of the components used to make widgets at a price of $100,000 for 50,000 units. Smith is currently making these components in its own factory. The following costs are associated with this part of the process when 50,000 units are produced: Direct material Direct labor Manufacturing overhead Total $ 54,000 20,000 70.000 $144,000 The manufacturing overhead consists of $32,000 of costs that will be eliminated if the components are no longer produced by Smith. The remaining manufacturing overhead will continue whether or not Smith makes the components. If the components are purchased, Smith can lease out the space not being used for $10,000. What is the amount of the cost difference and the decision? Multiple Choice Cost difference of $16,000 in favor of buying Cost difference of $4,000 in favor of making