[The Following Information Applies to the Questions Displayed Below

question 49

Multiple Choice

[The following information applies to the questions displayed below.]
Perry's Cycle Company manufactures annually 20,000 units of TushSeat,a bicycle seat used on many of the company's products,and also sold directly to retailers for $38 per unit.At the current level of production,the cost per unit to produce TushSeat consists of:
It has come to the attention of management that a seat of similar quality can be purchased from outside suppliers.
-Assume that Perry's fixed costs remain unchanged if the seats are purchased from an outside supplier.In order to operate more profitably by buying the seats rather than manufacturing them,Perry must negotiate a price per unit from the outside supplier that is less than:

• A)$27.
• B)$25.
• C)$22.
• D)$23.

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