The CJP Company Produces 10,000 Units of Item S10 Annually

Multiple Choice

The CJP Company produces 10,000 units of item S10 annually at a total cost of $190,000. The XYZ Company has offered to supply 10,000 units of S10 per year for $18 per unit.If CJP accepts the offer,$4 per unit of the fixed overhead would be saved.In addition,some of CJP's facilities could be rented to a third party for $15,000 per year.At what price would CJP be indifferent to XYZ's offer?

A) $17.00.
B) $17.50.
C) $18.50.
D) $19.50.