The Bogart Company produces 5,000 units of item SLM 46 annually at a total cost of $200,000

Direct materials	$	20,000
Direct labor		55,000
Variable overhead		45,000
Fixed overhead		80,000
Total	$	200,000

The Conner Company has offered to supply all 5,000 units of SLM 46 per year for $35 per unit. If Bogart accepts the offer, $8 per unit of the fixed overhead would be saved. In addition, some of Bogart's leased facilities could be vacated, reducing lease payments by $30,000 per year. At what price would Bogart be indifferent to Conner's offer?

a. $35.

b. $38.

c. $40.

d. $24.