The project management has established that to make 1000 conductors the following costs will be incurred, direct

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Question:

The project management has established that to make 1000 conductors the following costs will be incurred, direct materials $70 000, direct labour $26 000, variable and fixed overheads $15 000 each respectively. The project manager can purchase the 1000 conductors externally for $125 000. The avoidable fixed costs are $5 000 if the units are purchased externally. What are the cost savings if the project manager makes the conductors?

A) $1 000

B) $5 000

C) $10 000

D) $4 000