Answer the Following Question(s)using the Information Below

question 184

Multiple Choice

Answer the following question(s) using the information below.Schmidt Corporation produces a part that is used in the manufacture of one of its products.The costs associated with the production of 10,000 units of this part are as follows:
Of the fixed factory overhead costs, $30,000 is avoidable.
-Phil Company has offered to sell 10,000 units of the same part to Schmidt Corporation for $18 per unit.Assuming there is no other use for the facilities, Schmidt should

• A)make the part, as this would save $3 per unit.
• B)buy the part, as this would save $3 per unit.
• C)make the part, as this would save $4 per unit.
• D)make the part, as this would save $1 per unit.
• E)buy the part, as this would save $4 per unit.

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