WLS Company currently makes a key component for their tractors in house.The costs are as follows:

Per Unit

Direct Materials$4.00

Direct Labor6.00

Allocated Overhead10.00

Total Cost$20.00

If the component is purchased from an outside vendor the company will reduce their overhead costs by 80%. What is the maximum purchase price the company should consider to move to an outside vendor without respect to any other issue?

(present calculations for partial credit). Label your answer.