Cerise Corporation Manufacturers a Part for Its Production Cycle Jade Company Has Offered to Sell Cerise Corporation 5,000 Units

Multiple Choice

Cerise Corporation manufacturers a part for its production cycle. The costs per unit for 5,000 units of this part are as follows: $$\begin{array} { l r } \text { Direct materials } & \$ 16 \\\text { Direct labor } & 20 \\\text { Variable overhead } & 8 \\\text { Fixed overhead } & 16 \\\text { Total } & \$ 60\end{array}$$ Jade Company has offered to sell Cerise Corporation 5,000 units of the part for $56 per unit. If Cerise Corporation accepts Jade Company's offer, total fixed costs will be reduced to $30,000. Which of the following is correct decision and correct increase in profit?

A) Buy, $50,000
B) Buy, $20,000
C) Make, $10,000
D) Buy, $10,000