Whiteside Corporation manufactures a variety of appliances which all use Part B$89.$ Currently, Whiteside Corporation manufactures Part B$89$ itself. It has been producing

$11,000$ units of Part B$89$ annually. The annual costs of producing Part B$89$ at the level of $11,000$ units include:

All of the fixed manufacturing overhead costs would continue whether Part B$89$ is made internally or purchased from an outside supplier. Assume the company can

purchase $11,000$ units of the part from the Nadal Parts Company for $$20\mathrm{.}10$ each, and the facilities currently used to make the part could be used to manufacture $11,000$

units of another product that would have a $$9$ per unit contribution margin. If no additional fixed costs would be incurred, what should Whiteside Corporation do$?$

Selected Answer:

Make the new product and buy the part to earn an extra $$8\mathrm{.}30$ per unit contribution to profit.

Answers:

Continue to make the part to earn an extra $$8\mathrm{.}50$ per unit contribution to profit.

Make the new product and buy the part to earn an extra $$8\mathrm{.}30$ per unit contribution to profit.

Continue to make the part to earn an extra $$5\mathrm{.}70$ per unit contribution to profit.

Make the new product and buy the part to earn an extra $$5\mathrm{.}00$ per unit contribution to profit.