Diamond Brands Manufactures Rice, Wheat, and Oat Cereals The Manufacturing Overhead Consists of $2,000 of Variable Costs with Has

Diamond Brands manufactures rice, wheat, and oat cereals. Sanders Company has approached Diamond Brands with a proposal to sell the company the rice cereals at a price of $22,000 for 20,000 pounds. The following costs are associated with production of 20,000 pounds of rice cereal: $\begin{array}{lr}\text { Direct material } & \$ 13,000 \\\text { Direct labor } & 5,000 \\\text { Manufacturing overhead } & 7000\\\text { Total }&\$25,000\end{array}$ The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. What is the amount of avoidable costs if Diamond Brands buys rather than makes the rice cereal?

A) $25,000
B) $22,000
C) $23,000
D) $20,000