Sandusky Inc $\quad \$ 600,000$ Fixed Costs $\quad 900,000$ An Outside Supplier Is Interested in Producing the Item for Variable

Multiple Choice

Sandusky Inc. has the following costs when producing 100,000 units: Variable costs $\quad \$ 600,000$
Fixed costs $\quad 900,000$ An outside supplier is interested in producing the item for Sandusky. If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income. At what unit price would Sandusky accept the outside supplier's offer if Sandusky wanted to increase net income by $120,000?

A) $8.70
B) $6.30
C) $7.50
D) $5.70