5. 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. $7

c. $11

d. $6

Use the information below to answer the following question(s):

Cruise 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 6,000 units, are as follows:

Direct materials

$4.00

Direct labour

$4.00

Variable manufacturing overhead

$3.00

Fixed manufacturing overhead

$1.00

Total cost

$12.00

The fixed overhead costs are unavoidable.