Rubium Micro Devices Currently Manufactures a Subassembly for Its Main

Multiple Choice

Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows:

Crayola Technologies Inc. has contacted Rubium with an offer to sell 6,000 of the subassemblies for $144.00 each. Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal. Should Rubium make or buy the subassemblies? What is the difference between the two alternatives?

A) Buy; savings = $89,000
B) Buy; savings = $7,000
C) Make; savings = $1,000
D) Make; savings = $203,000