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Penith Company manufactures stereos and can make or buy a particular subcomponent. The cost to...

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Accounting

Penith Company manufactures stereos and can make or buy a particular subcomponent. The cost to manufacture the subcomponent is $4.00 for direct materials, $5.00 for direct labor, and $7.00 for variable overhead. If Penith buys the subcomponent, facilities that would be used to make the component can be rented to a tenant for $30,000 per month. If Penith requires 20,000 subcomponents per month, the maximum price per unit Penith should consider paying is:
Select one:
a. $17.50.
b. $13.00.
c. $9.00.
d. $16.00.

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