Mad Cow Company Manufactures a Part for Its Production Cycle

Multiple Choice

Mad Cow Company manufactures a part for its production cycle. The costs per unit for 38,000 units of this part are as follows: $\begin{array}{ll}\text { Direct materials } & \$ 3 \\\text { Direct labor } & 5 \\\text { Variable factory overhead } & 4 \\\text { Fixed factory overhead } & \underline{3} \\\text { Total costs } & \underline{\underline{15}} \\\end{array}$ The fixed factory overhead costs are unavoidable. Assuming no other use of their facilities, the highest price that Mad Cow Company should be willing to pay for the part is:

A) $11
B) $12
C) $15
D) $8