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16 15 pts Iron Co was recently approached by a supplier that would like to sell Iron Co a part. Iron Co currently builds the
16 15 pts Iron Co was recently approached by a supplier that would like to sell Iron Co a part. Iron Co currently builds the part themselves and uses 18,000 of the parts per year. Unit costs for the part given the production level of 18,000 are as follows: Direct materials (variable) Direct labor (variable) $5.25 6.25 Variable manufacturing overhead 0.50 Fixed manufacturing overhead Unit product cost 3.40 $15.40 Of the fixed manufacturing overhead, 40% is avoidable if the component were bought from the outside supplier. Also, if the part is purchased, the factory space used to make the part could be rented to another company for $10,000 per year. What price would the supplier have to offer per unit such that Iron Co would be indifferent between making and buying the part? Round your answer to the nearest cent (e.g., 1.23)
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