The costs for Clark Equipment to make a part in house are displayed below:
Direct Materials $ 3.00
Direct Labor 7.00
Allocated Overhead 10.00
Total Cost $20.00
Moving to an outside vendor will allow Clark Equipment to reduce their overhead costs by 70%. What is the maximum purchase price the company should consider to move to an outside vendor without respect to any other issue?
(present calculations for partial credit). Label your answer.