Chafford Inc currently manufactures 2000 subcomponents in one of its facttories The unit costs to produce the subcomponents are:

	per unit
direct materials	62
direct labor	100
variable manufacturing overhead	76
fixed manufacturing overhead	91
total unit cost	329

Due to a labor strike, Chafford is considering purchasing the subcomponents from an outside supplier for $248 per unit. The union is demanding 20% increase in pay for direct labor. Fixed overhead is not avoidable. How much could Chafford increase their pay before it would be more advantageous to purchase the subcomponents from the outside supplier?

a. 5% b. 10% c. 50% d. 50%