Choice "A" is correct. Monthly costs of the company would increase by $5,000 if the company elects to buy rather than make its component part. Change in cost is computed as follows:

Choice "b" is incorrect. A decrease of $15,000 appears to include fixed plant facility costs as part of the incremental reduction in expenses.Choice "d" is incorrect. A decrease of $10,000 appears to include fixed plant facility costs as part of the incremental reduction in expenses while ignoring the benefit of the rental of idle space.Choice "c" is incorrect. An increase of $10,000 appears to ignore the benefit of the rental of idle space.