The Northern Ring Company manufactures 2,200 telephones per year. The full manufacturing costs per telephone are as follows:

Direct materials	$2.00
Direct labor	8.00
Variable manufacturing overhead	6.00
Average fixed manufacturing overhead	6.00
Total	$22.00

The Texas Ring Company has offered to sell Northern Ring Company 2,200 telephones for $15 per unit. If Northern Ring Company accepts the offer, $11,000 of fixed overhead will be eliminated. Northern Ring should:

Select one:

a. Buy the telephones; the savings is $26,400

b. Make the telephones; the savings is $13,200

c. Buy the telephones; the savings is $13,200

d. Make the telephones; the savings is $2,200