Mad Cow Company manufactures a part for its production cycle. The costs per unit for 38,000 units of this part are as follows: $\begin{array}{ll}
\text { Direct materials } & \$ 3 \
\text { Direct labor } & 5 \
\text { Variable factory overhead } & 4 \
\text { Fixed factory overhead } & \underline{3} \
\text { Total costs } & \underline{\underline{15}} \
\end{array}$ The fixed factory overhead costs are unavoidable. Assuming no other use of their facilities, the highest price that Mad Cow Company should be willing to pay for the part is:
A) $11
B) $12
C) $15
D) $8

Question

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The Answer of Mad Cow Company manufactures a part for its production cycle. The costs per unit for 38,000 units of this part are as follows: $\begin{array}{ll}
\text { Direct materials } & \$ 3 \
\text { Direct labor } & 5 \
\text { Variable factory overhead } & 4 \
\text { Fixed factory overhead } & \underline{3} \
\text { Total costs } & \underline{\underline{15}} \
\end{array}$ The fixed factory overhead costs are unavoidable. Assuming no other use of their facilities, the highest price that Mad Cow Company should be willing to pay for the part is:
A) $11
B) $12
C) $15
D) $8

Mad Cow Company Manufactures a Part for Its Production Cycle