Sandusky Inc. has the following costs when producing 100,000 units:

Variable costs $600,000

Fixed costs 900,000

An outside supplier is interested in producing the item for Sandusky. If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income. At what unit price would Sandusky accept the outside supplier%u2019s offer if Sandusky wanted to increase net income by $120,000?

a. $7.50

b. $6.30

c. $8.70

d. $5.70