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Zalinski Company manufactures a part for its production cycle. The costs per unit for 10,000...

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Accounting

Zalinski Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows:

Per Unit

Direct materials $25.00

Direct labor 20.00

Variable factory overhead 10.00

Fixed factory overhead 15.00

Total costs $70.00

The fixed factory overhead costs are unavoidable. Tokic Company has offered to sell 10,000 units of the same part to Zalinski Company for $60 per unit. Assuming no other use for the facilities, Zalinski Company should ________.

A) make the part to save $25,000

B) make the part to save $50,000

C) buy the part from Tokic Company to save $40,000

D) buy the part from Tokic Company to save $60,000

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