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The Sleepy Bandit Company produces highly technical machinery for medical industry. The company uses 10,000 units of a part in its production process of its

The Sleepy Bandit Company produces highly technical machinery for medical industry. The company uses 10,000 units of a part in its production process of its 9000RTS machine. The costs to make a part are: direct material, $12; direct labor, $25; variable overhead, $13; and fixed overhead, $30. The Sleepy Bandit Company has received a quote of $56 from a potential supplier for this part. If Sleepy Bandit buys the part, 60 percent of the fixed overhead would continue. The Sleepy Bandit Company would be better off by

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$60,000 to buy the part.

$240,000 to buy the part.

$60,000 to manufacture the part.

$40,000 to buy the part.

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