The following cost card was found in the Inventory ledger for part AAA. Direct Materials $600, 20 hours of Direct Labor at $20 per hour $400, manufacturing overhead is applied at $15 per direct labor hour, one third of the overhead is fixed the rest is variable. Calculate the breakeven bid to outsource this component?
a. $1200
b. $1100
c. $1300
d. $800
e. None of the above are correct.