Olive Corp.currently makes 20,000 subcomponents a year in one of its factories.The unit costs to produce are: An outside supplier has offered to provide Olive Corp.with the 20,000 subcomponents at a $36 per unit price.Fixed overhead is not avoidable.What is the maximum price Olive Corp.should pay the outside supplier?
A)$32
B)$36
C)$40
D)$44

Question

Olive Corp.currently makes 20,000 subcomponents a year in one of its factories.The unit costs to produce are:  An outside supplier has offered to provide Olive Corp.with the 20,000 subcomponents at a $36 per unit price.Fixed overhead is not avoidable.What is the maximum price Olive Corp.should pay the outside supplier?
A)$32 
B)$36 
C)$40 
D)$44

Quizplus · Accepted Answer

The Answer of Olive Corp.currently makes 20,000 subcomponents a year in one of its factories.The unit costs to produce are:  An outside supplier has offered to provide Olive Corp.with the 20,000 subcomponents at a $36 per unit price.Fixed overhead is not avoidable.What is the maximum price Olive Corp.should pay the outside supplier?
A)$32 
B)$36 
C)$40 
D)$44