Bolt Company makes $20,000$ units per year of a part it uses

in the products it manufactures. The per unit product cost

of this part is shown below:

direct materials $..............$ $ $6\mathrm{.}80$

direct labor $....................$ $$12\mathrm{.}35$

variable overhead $..............$ $ $9\mathrm{.}55$

fixed overhead $.............$ $$11\mathrm{.}30$

total $.................$ $$40\mathrm{.}00$

An outside supplier has offered to sell to Bolt Company

the $20,000$ units of this part that it needs each year

for $$38\mathrm{.}25$ per unit. If Bolt Company accepts this offer,

the facilities now being used to make this part could be

used to make more units of a product that has high demand.

The additional contribution margin that could be earned on

this other product would be $$80,000$ per year.

If Bolt Company accepts the outside supplier's offer, $$8\mathrm{.}00$

of the fixed overhead cost being applied to the part would

continue to be incurred and would be allocated to Bolt Co$.\text{'}$s

other products. The remaining amount of the fixed overhead

would be eliminated if Bolt accepts the outside supplier's

offer.

Calculate the selling price per unit charged by the outside

supplier that would cause Bolt Company to be economically

indifferent between making and buying the part.