XYZ Company manufactures a part for its production cycle. The annual costs per unit for 5,000 units of the part are as f

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XYZ Company manufactures a part for its production cycle. The
annual costs per unit for 5,000 units of the part are as
follows:
Per Unit
Direct
materials
$3.00
Direct
labor
5.00
Variable factory
overhead
4.00
Fixed factory
overhead 2.00
Total
costs
$14.00
The fixed factory overhead costs
are unavoidable. Another company has offered
to sell 5,000 units of the same part to XYZ Company for $15 per
unit. The facilities currently used to make the part could be
rented out to another manufacturer for $20,000 a year. XYZ Company
should ________.
Select one:
a. buy the part and rent facilities
b. make the part to save $5,000
c. None of the above
d. make the part to save $15,000