U-RIDE, Incorporated currently produces the electric engines that are used in golf carts made and sold by the Company. Electco has offered to sell the electric engines to U-RIDE at a price of $235 each.

Current production information follows:

Unit-level material and labor	$ 200
Facility-level depreciation of manufacturing equipment	$ 5,500	/month
Product-level engine production supervisor's salary	$ 2,500	/month
Annual facility-level utilities	$ 17,500

Buying the engines will free up manufacturing capacity that could be used to make a new economy line golf cart that would produce an additional $65,000 profit per year. U-RIDE is currently operating profitably producing and selling 2,500 engines annually. Based on this information, which of the following is true?

Multiple Choice

Buying the units would increase U-RIDE's cost by $23 per unit.

U-RIDE has avoidable costs of less than $235 per unit and should therefore buy engines.

The cost of buying the engines is $3 per unit less than the relevant cost of making the units.

The $65,000 is not relevant because it is an estimate.