Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:

Direct materials	$45,000
Direct labour	35,000
Variable factory overhead	30,000
Fixed factory overhead	70,000
Total costs	$180,000

Of the fixed factory overhead costs, $30,000 is avoidable.

1. Assuming no other use of their facilities, the highest price that Schmidt should be willing to pay for 10,000 units of the part is
   1. $210,000.
   2. $160,000.
   3. $150,000.
   4. $220,000.
   5. $140,000.