Medford Corporation operates a plant with a productive capacity to manufacture 20,000 units

of its product a year. The follow information pertains to the production costs at capacity:

Variable costs. P160,000

Fixed costs 240,000

Total costs P400,000

A supplier has offered to sell 4,000 units to Medford annually. Assume no change in the fixed

costs. What is the price per unit that makes Medford indifferent between the "make" and "buy"

options?

A. 20

b. 8

c. 12

d. 0