Question
Joy Company's Division A produces a carburetor that is used by many outside manufacturers as a key part in their products. Costs and sales
Joy Company's Division A produces a carburetor that is used by many outside manufacturers as a key part in their products. Costs and sales data relating to carburetor are given below: Selling price per unit Variable cost per unit $40 20 6 Fixed cost per unit Joy Company's Division B is introducing a new engine that will use a carburetor such as the one produced in Division A. An outside supplier has quoted Division B a price of $38 per carburetor. Division B would like to purchase the carburetors from Division A, if an acceptable transfer price can be worked out. The maximum price Division B would be willing to pay Division A would be?
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