Striker 44 Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows:

Of the fixed factory overhead costs, $58,000 is avoidable.
Assuming no other use of their facilities, the highest price that McMurphy should be willing to pay for 12,000 units of the part is ________.
A) $408,000
B) $273,000
C) $331,000
D) $351,000

Question

Striker 44 Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows:

Of the fixed factory overhead costs, $58,000 is avoidable.
Assuming no other use of their facilities, the highest price that McMurphy should be willing to pay for 12,000 units of the part is ________.
A) $408,000 
B) $273,000 
C) $331,000 
D) $351,000

Quizplus · Accepted Answer

$86,000 + $130,000 + $57,000 + $58,000 = $331,000

Striker 44 Corporation Produces a Part That Is Used in the Manufacture