Daly Company Produces a Part That Is Used in the Manufacture

Multiple Choice

Daly Company produces a part that is used in the manufacture of one of its products.The costs associated with the production of 5,000 units of this part are as follows: $\begin{array}{lr}\text { Direct materials } & \$ 108,000 \\\text { Direct labor } & 156,000 \\\text { Variable factory overhead } & 72,000 \\\text { Fixed factory overhead } & 168,000 \\\text { Total costs } & \$ 504,000\end{array}$ Of the fixed factory overhead costs, $72,000 is avoidable.Assuming no other use of their facilities, the highest price that Daly Company should be willing to pay for 5,000 units of the part is _____.

A) $504,000
B) $336,000
C) $408,000
D) $288,000