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Davidson Company produces a part that is used in the manufacture of one of its p...
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Davidson Company produces a part that is used in the manufacture of one of its products. The costs associated with the production of 5,000 units of this part are as follows:Direct materials $108,000Direct labor 156,000Variable factory overhead 70,000Fixed factory overhead 168,000Total costs $502,000Of the fixed factory overhead costs, $72,000 are avoidable. Assuming there is no other use for the facilities. What is the highest price Davidson Company should be willing to pay for 5,000 units of the part?
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