Use the Information Below to Answer the Following Question(s)

Use the information below to answer the following question(s) :
Compact Appliances uses a standard part in the manufacture of several of its air conditioners. The cost of producing 40,000 parts is $110,000, which includes fixed costs of $50,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $4.00 per unit, and avoid 40% of the fixed costs.
-If Compact Appliances buys the part, what is the most Compact Appliances can spend per unit so that operating income equals the operating income from making the part?

A) $1.60
B) $1.50
C) $2.00
D) $3.50