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The Well's Run Dry, LLC manufactures bottled water dispensers for home and office use. Run...

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The Well's Run Dry, LLC manufactures bottled water dispensers for home and office use. Run Dry makes 40,000 units per year of a part it uses in its water dispensers. At an annual activity level of 40,000 units, Run Dry's total product costs are $2,868,000. Of this amount, $984,000 is fixed. The company is considering whether it should outsource production of the part. If the part were purchased from the outside supplier, 90% of the fixed manufacturing overhead cost would continue, and the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional income from this other product would be $349,800 per year. Assume the company will need 45,000 units of the part next year. At what purchase price per unit will the company be economically indifferent between making and buying the part from the outside supplier? O A. $59.22 O B. $56.30 OC. $61.95 D. $53.30 O E. $57.06

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