Detailed Answer
Answer (D) is correct. Exclusive of the fixed overhead, the unit cost of making the plugs is $28 ($36 total cost – $8 fixed OH). Purchasing the plugs will avoid $2 per unit of fixed overhead ($60,000 OH applied ÷ 30,000 units). Accordingly, $6 per unit of fixed overhead is unavoidable, and the relevant (avoidable) unit cost of making the plugs is $30 [$36 total cost – ($8 fixed OH – $2 avoidable cost)]. The purchase option therefore results in a $3-per-unit loss ($33 purchase price – $30 relevant cost).