Blue ridge bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 45,000 parts is $138,000, which includes fixed costs of $69,000 and variable costs of $69,000. The company can buy the part from an outside supplier for $4.00 per unit, and avoid ________ .
1) fixed costs
2) variable costs
3) 100% of the manufacturing process
4) the need to produce the parts in-house