The highest price that Piels should be willing to pay for 10,000 units of the part is:
Highest Price = Avoidable Costs = Direct Materials + Direct Labor + Variable Factory Overhead + Fixed Factory Overhead (Avoidable)
= $(87,000 + 126,000 + 58,000 + 55,000)
= $326,000
The correct option is the 2nd Option = $326,000
Piels Corporation produces a part that is used in the manufacture of one of its products....
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