Lynn Valley Corporation Currently Manufactures a Subassembly for Its Main

Multiple Choice

Lynn Valley Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows:
Reliance Corp has contacted Lynn Valley with an offer to sell them 5,000 of the subassemblies for $44.00 each. Lynn Valley will eliminate $50,000 of fixed overhead if it accepts the proposal.
Should Omark make or buy the subassemblies? What is the difference between the two alternatives?

A) buy; savings = $20,000
B) buy; savings = $50,000
C) make; savings = $60,000
D) make; savings = $10,000
E) buy; savings = $10,000