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1. Motor Division makes a motor that it sells to customers outside of the company. Data concerning this motor appear below: Selling Price to Outside

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1. Motor Division makes a motor that it sells to customers outside of the company. Data concerning this motor appear below: Selling Price to Outside Customers $ 250 Variable Cost per Unit 180 Total Fixed Costs $10,000 Capacity in Units 30,000 Consumer Division of the same company would like to use the motor manufactured by Motor Division in one of its products. Consumer Division currently purchases the part made by an outside company for $225 per unit. Consumer Division requires 3,000 units of the motor each period. Motor Division is currently selling 30,000 units to outside customers. If Motor Division sells to Consumer Division rather than to outside customers, the variable cost per unit would be $5 lower. What should be the lowest acceptable transfer price from the perspective of the Motor Division? A $250. B $175 C) $245. D $180. E $225

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