The western Division of Pryto Cororation sells Part D to other companies for $78.50 per unit. According to the company's cost accounting system, the costs to Western Division to make a unit of Product D are:

Direct material: $62

Direct labor: $ 2

Variable manufacturing overhead:$10

Fixed manufacturing overhead:$2

The Southern Division of Pryto Corporation uses a part much like Part D in one of its products. The Southern Division can buy the part from an outside supplier for $78.25 per unit. However, the Southern Division could use Part D stead of this part that it purchases from outside suppliers. What is the most that the Southern Division would be willing to pay the Western Division for Product D?

A. $78.25 per unit

B. $74.00 per unit

C. $78.50 per unit

D. $76.00 per unit