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Murray Corp. currently makes 5,850 subcomponents a year in one of its factories. The unit costs to produce are: Description Per unit Direct materials $7

Murray Corp. currently makes 5,850 subcomponents a year in one of its factories. The unit costs to produce are:

Description

Per unit

Direct materials

$7

Direct labor

2

Variable manufacturing overhead

1

Fixed manufacturing overhead

2

An outside supplier has offered to provide Murray Corp. with the 5,850 subcomponents at a $15 per unit price. Fixed overhead is not avoidable. What is the maximum price Murray Corp. should pay the outside supplier?

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