Book Publishing, Inc operates a bookbinding division. Management is considering whether the hard cardboard for binding should be made internally or purchased from a supplier for $2.35 per book. The current internal production costs for the cardboard average $2.50 of variable costs and $10,000 of fixed costs for the 20,000 books bound annually. What would you recommend Book Publishing do in this situationi, and what is the effect on net income?

Select one:

a. Make, increase net income by $13,000

b. Buy, increase net income by $3,000

c. Buy, increase net income by $13,000

d. Make, increase net income by $3,000