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Sage Company is operating at 90% of capacity and is currently purchasing a part used...

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Accounting

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18 per unit. The unit cost for the business to make the part is $20 including fixed costs and $9 excluding fixed costs. If 30,809 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?
a. $277,281 cost decrease
b. $61,618 cost increase
c. $277,281 cost increase
d. $554,562 cost decrease
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