Make or buy decision

Hoosier Manufacturing needs to source a specific component for a new product and is considering two options: buy directly from a supplier or produce it in-house. The demand for the item is 12,000 units per year.

Hoosier estimates that its holding cost is 25% per year, and has received the following quotes.

Option 1: Buy from a supplier. PrecisionWorks has quoted Hoosier a price of $40 per unit. Because the part requires special tooling, PrecisionWorks also requires a flat fee of $900 per batch. Hoosier estimates that they will incur an additional $100 per order plus $2.75 per unit in transportation costs.

Option 2: Produce in-house. Hoosier estimates that it can produce this item at a rate of 90 per day (there are about 250 working days per year). Because Hoosier is not as efficient as PrecisionWorks, tooling will cost Hoosier $4,000 per batch, and each unit cost $42 to produce in-house.

Question: What unit cost would PrecisionWorks have to charge for Hoosier to consider changing options? To the nearest cent.