Finders Company Manufactures Sewing Machines and Requires 60,000 Units of a Component

Finders Company manufactures sewing machines and requires 60,000 units of a component that is used in the manufacturing process. If Flinders buys the part from Serrano Brothers, the plant will be idle. Of the fixed overhead, 45% will continue regardless of the decision. The cost to buy the part from Serrano Brothers is $46. The unit cost to make the part is: $$\begin{array} { l r } \text { Direct materials } & \$ 12 \\\text { Direct 1abor } & 20 \\\text { Variable overhead } & 12 \\\text { Average fixed overhead } &\underline { 10 }\\\quad \text { Total } & \underline { \underline { \$ 54 } }\end{array}$$ Relevant costs to make the part are

A) $1,320,000
B) $1,380,000
C) $2,970,000
D) $2,910,000