Melita Sailboats Company Manufactures 100 Luxury Yachts Per Month

Melita Sailboats Company manufactures 100 luxury yachts per month.A compact media center is included in each yacht.Melita Sailboats manufactures the media center in-house but is considering the possibility of outsourcing this function.At present,the variable cost per unit is $280,and the fixed costs are $40,000 per month.If it outsources the media centers,fixed costs could be reduced by half,and the vacant facilities could be rented out to earn $4,000 per month of rental income.At what contract cost would outsourcing pay off for Melita?

A) $520 per unit
B) $480 per unit
C) $280 per unit
D) $400 per unit