Murray Corp currently makes 5,850 subcomponents a year in one of its factories The unit costs to produce are Description Per unit Direct materials $7 Direct labor 2 Variable manufacturing overhead 1 Fixed manufacturing overhead 2 An outside supplier has offered to provide Murray Corp with the 5,850 subcomponents at a $15 per unit price Fixed overhead is not avoidable What is the maximum price Murray Corp should pay the outside supplier

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Question: Murray Corp. currently makes 5,850 subcomponents a year in one of its factories. The unit costs to produce are: Description Per unit Direct materials $7

Murray Corp. currently makes 5,850 subcomponents a year in one of its factories. The unit costs to produce are:

Description	Per unit
Direct materials	$7
Direct labor	2
Variable manufacturing overhead	1
Fixed manufacturing overhead	2

An outside supplier has offered to provide Murray Corp. with the 5,850 subcomponents at a $15 per unit price. Fixed overhead is not avoidable. What is the maximum price Murray Corp. should pay the outside supplier?

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