Answer the Following Questions Using the Information Below:
Stephans Corporation

Multiple Choice

Answer the following questions using the information below:
Stephans Corporation currently manufactures a subassembly for its main product.The costs per unit are as follows:
$$\begin{array} { l r } \text { Direct materials } & \$ 1.00 \\\text { Direct labour } & 10.00 \\\text { Variable overhead } & 5.00 \\\text { Fixed overhead } & \underline { 8.00 } \\\quad \text { Total } & \underline{\$ 24.00} \\\end{array}$$ Bill Company has contacted Stephans with an offer to sell them 5000 of the subassemblies for $22.00 each.Stephans will eliminate $25 000 of fixed overhead if it accepts the proposal.
-What are the relevant costs for Stephans?

A) $125 000
B) $140 000
C) $105 000
D) $80 000