Striker 44 corporation produces a part that is used in the manufacture of one of its products. the costs associated with the production of 12,000 units of this part are as follows: direct materials $86,000 direct labor 130,000 variable factory overhead 57,000 fixed factory overhead 135,000 total costs $408,000 of the fixed factory overhead costs, $58,000 is avoidable. assuming no other use of their facilities, the highest price that mcmurphy should be willing to pay for 12,000 units of the part is a. $331,000 b. $273,000 c. $351,000 d. $408,000

correct option is A. $331,000

Explanation:

given data

Direct materials =  $86,000

Direct labor = 130,000

Variable factory overhead = 57,000

Fixed factory overhead = 135,000

Total costs = $408,000

avoidable =  $58,000

to find out

highest price that McMurphy should be willing to pay for 12,000 units of the part is

solution

we get here highest price that McMurphy should be willing to pay for 12,000 units of the part that is express as

highest price  = Direct material + Direct Labor + variable factory overhead + avoidable fixed overhead   1

put here value we get

highest price  = $86000 + $130000 + $57000 + $58000

highest price  = $331,000

so correct option is A. $331,000

a. money supply  

have a good day