Spahr Company Produces a Part That Is Used in the Manufacture

Spahr Company produces a part that is used in the manufacture of one of its products.The unit manufacturing costs of this part,assuming a production level of 5,000 units,are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 2.00 \\\hline \text { Direct labor } & \$ 4.00 \\\hline \text { Variable manufacturing overhead } & \$ 3.00 \\\hline \text { Fixed manufacturing overhead } & \$ 1.00 \\\hline \text { Total cost } & \$ 10.00 \\\hline & \\\hline \text { The Exed overhead costs are unavaidable. } & \\\hline\end{array}$$
- Assuming Spahr Company can purchase 5,000 units of the part from Sexton Company for $13 each,and the facilities currently used to make the part could be rented out to another manufacturer for $24,000 a year,what should Spahr Company do?

A) Make the part and save $4.20 per unit.
B) Make the part and save $2.20 per unit.
C) Buy the part and save $0.80 per unit.
D) Buy the part and save $1.80 per unit.