Compact Appliances uses a standard part in the manufacture of several of its air conditioners. The cost of producing 40,000 parts is $110,000, which includes fixed costs of $50,000 and variable costs of $60,000. By outsourcing the part, the company can avoid 40% of the fixed costs. If Compact Appliances buys the part, what is the most Compact Appliances can spend per unit so that operating income equals the operating income from making the part? A. $1.75 B. $2.00 C. $2.25 D. $2.75 ****************** Star Appliance manufactures a variety of appliances which all use Part 92F. Currently, Star Appliance manufactures Part 92F itself. It has been producing 8,000 units of Part 92F annually. The annual costs of producing Part 92F at the level of 8,000 units include: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost $ 4.00 $ 8.00 $ 6.00 $ 6.00 $ 24.00 All of the fixed manufacturing overhead costs would continue whether Part 92F is made internally or purchased from an outside supplier. Assume Star Appliance can purchase 8,000 units of the part from the Roger Parts Company for $22 each, and the facilities currently used to make the part could be used to manufacture 8,000 units of another product that would have a $3 per unit contribution margin. If no additional fixed costs would be incurred, what should Star Appliance do? A. Make the new product and buy the part to earn an extra $8.50 per unit contribution to profit. B. Make the new product and buy the part to earn an extra $5.50 per unit contribution to profit. C. Continue to make the part to earn an extra $1.00 per unit contribution to profit. D. Continue to make the part to earn an extra $2.50 per unit contribution to profit