Lift Dentistry Services operates in a large metropolitan area. Lift

has its own dental laboratory used to produce porcelain and gold

crowns. The per unit variable costs to produce these crowns are:

porcelain.......$81 per crown

gold............$115 per crown

Fixed overhead includes the following:

porcelaingold

supervisor's salary$15,000$20,000

allocated general overhead$ 6,000$ 6,000

A local dental laboratory has offered to supply Lift all the crowns

it needs. Its price is $100 per porcelain crown and $136 per gold

crown; however, the offer is conditional on supplying both types of

crowns (i.e., the local laboratory will not supply just one type of

crown for the price indicated). If the offer is accepted, Lift could

rent the space now being used to make the crowns to another company

for $16,000 per year. Lift uses 1,800 porcelain crowns and 1,200 gold

crown per year.

Assume the local laboratory will charge $100 per porcelain crown, but

is willing to negotiate on the price of the gold crowns. Calculate the

selling price per unit charged by the local laboratory for the gold

crowns that would make Lift Dentistry Services economically indifferent

between making the crowns themselves and purchasing the crowns from the

local laboratory.