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Automotive Inc. manufactures various automotive supplies, including 20,000 steering wheels, which are used with many other company products and are also sold directly to retailers

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Automotive Inc. manufactures various automotive supplies, including 20,000 steering wheels, which are used with many other company products and are also sold directly to retailers for $38 per unit. At the current level of production, the cost per unit to produce the steering wheels consists of: Direct materials Direct labor Variable overhead Fixed overhead $9.00 $7.00 $6.00 $3.00 Management was recently approached by Driver Corporation which makes a similar quality steering wheel and is willing to sell their steering wheel to Automotive Inc. Assuming that Automotive Inc.'s fixed costs will remain unchanged if the steering wheels are purchased from Driver Corporation, in order to operate more profitably by buying the steering wheels rather than manufacturing them, Automotive Inc. must negotiate a price per unit from Driver Corporation that is less than: Select one: a. $38 O b. $16 oc. $22 d. $25

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