Question
15. Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for
15. Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows: Annual production capacity 80,000 units Selling price of the item to outside customers $ 35 Variable cost per unit $ 23 Fixed cost per unit $ 5 Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. If outside customers demand only 50,000 units per year, then what is the lowest acceptable transfer price from the viewpoint of the selling division?
A. $35
B. $33
C. $28
D. $23 THIS IS THE ANSWER
E. None of the above
PLEASE SOLVE STEP BY STEP WITH THIS PROBLEM. I Dont understand.***
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