Genent's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for

1 comma 0001,000

units are as follows:

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Direct materials	$46,000
Direct labor	6,500
Variable overhead costs	34,500
Fixed overhead costs	22,000
Total costs	$109,000

It is estimated that

99%

of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Genent's Engine Company has the option of purchasing the part from an outside supplier at

$ 93.75$93.75

per unit.

The maximum price that Genent's Engine Company should be willing to pay the outside supplier is

________.

A.

$ 109$109

per TE456 part

B.

$ 110.98$110.98

per TE456 part

C.

$ 87$87

per TE456 part

D.

$ 88.98$88.98

per TE456 part