Swifty, Inc. can produce 100 units of a component part with the following costs:

Direct Materials

$29500Direct Labour14200Variable Overhead31400Fixed Overhead21300

If Swifty, Inc. can purchase the component externally for $88000 and only $7600 of the fixed costs can be avoided, what is the correct "make-or-buy decision"?

a)Make and save $800.

b)Buy and save $800.

c)Make and save $5300.

d)Buy and save $12900.