A Manufacturing Company Needs to Know Whether to Make In-House

Multiple Choice

A manufacturing company needs to know whether to make in-house or buy a roller gear assembly for its production of a new fax machine. The company expects to produce 9,000 units per year. The following estimates have been made:
$\begin{array}{|l|c|c|}\hline & \text { Make } & \text { Buy } \\\hline \text { Fixed cost per year } & \$ 8,000 & \$ 0 \\\hline \text { Variable cost per part } & \$ 5.45 & \$ 6.93 \\\hline\end{array}$
-The annual cost to buy the roller gear assembly is _____.

A) more than $30,000 but less than or equal to $40,000
B) more than $40,000 but less than or equal to $50,000
C) more than $50,000 but less than or equal to $60,000
D) more than $60,000