Make or Buy

Desert Industries manufactures $5,000$ units of Part X$300$ each month for use in production. The facilities now being used to produce Part X$300$ have fixed monthly overhead costs of $$60,000,$ and a theoretical capacity to produce $7,000$ units per month. If Desert were to buy Part X$300$ from an outside supplier, the facilities would be idle and $80\%$ of the fixed costs would continue to be incurred. There are no alternative uses for the production facilities. The variable production costs of Part X$300$ are $$28$ per unit. Fixed overhead is allocated based on planned production levels.

If Desert Industries continues to use $5,000$ units of Part X$300$ each month, it would realize a net benefit by purchasing Part X$300$ from an outside supplier only if the supplier$$s unit price is less than what amount?

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