Spahr Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 5,000 units, are as follows:

Direct materials

$2.00

Direct labour

$4.00

Variable manufacturing overhead

4.00

Fixed manufacturing overhead

$1.00

Total cost

$11.00

The fixed overhead costs are unavoidable.

Assuming no other use for its facilities, what is the highest price per unit that Spahr Company should be willing to pay for the part?

a.$10

b.$8

c.$12

d.$6