Alieia Boat Company manufactures 100 luxury yachts per month. A navigation system is included in each yacht. Alieia Boat manufactures the navigation system in-house but is considering the possibility of outsourcing this function. At present, the variable cost per unit is $280,and the fixed costs are $38,000 per month. If it outsources the security system, fixed costs could be reduced by half, and the vacant facilities could be rented out to earn $3000 per month of rental income. What is the maximum contract cost that Alieia should pay for outsourcing?

A)any cost lower than $500 per unit
B)any cost lower than $470 per unit
C)any cost lower than $280 per unit
D)any cost lower than $380 per unit

Answer rating: 100% (QA)

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