Spahr Company Produces a Part That Is Used in the Manufacture

question 13

Multiple Choice

Spahr Company produces a part that is used in the manufacture of one of its products.The unit manufacturing costs of this part,assuming a production level of 5,000 units,are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 2.00 \\\hline \text { Direct labor } & \$ 4.00 \\\hline \text { Variable manufacturing overhead } & \$ 3.00 \\\hline \text { Fixed manufacturing overhead } & \$ 1.00 \\\hline \text { Total cost } & \$ 10.00 \\\hline & \\\hline \text { The Exed overhead costs are unavaidable. } & \\\hline\end{array}$$
-Assuming no other use for its facilities,what is the highest price per unit that Spahr Company should be willing to pay for the part?

• A)$10
• B)$6
• C)$3
• D)$9

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