Birch Company Manufactures a Part for Its Production Cycle

Multiple Choice

Birch Company manufactures a part for its production cycle.The costs per unit for 5,000 units of the part are as follows: The fixed factory overhead costs are unavoidable.Spalding Company has offered to sell 5,000 units of the same part to Birch Company for $15 per unit.Assuming no other use for the facilities,Birch Company should ________.

A) make the part to save $1 per unit
B) make the part to save $3 per unit
C) buy the part from Spalding Company to save $1 per unit
D) buy the part from Spalding Company to save $3 per unit