The Northern Ring Company manufactures 2,400 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 2,400 telephones for $15 per unit. If Northern Ring Company accepts the offer, $12,000 of fixed overhead will be eliminated. Northern Ring should:

Select one:

a. Make the telephones; the savings is $14,400

b. Buy the telephones; the savings is $28,800

c. Make the telephones; the savings is $2,400

d. Buy the telephones; the savings is $14,400