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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Definitions:

Epineurium

The outermost layer of connective tissue surrounding a nerve, providing protection and support to the nerve fibers.

Endoneurium

The delicate connective tissue that individually encloses each nerve fiber within peripheral nerves, providing support and protection.

Perineurium

The connective tissue sheath that encloses each fascicle of nerve fibers within a peripheral nerve, providing support and protection.

Fascicle

A bundle of muscle or nerve fibers bound together by connective tissue.