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28 Coronado Industries manufactures and sells high-priced motorcycles. The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division.
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Coronado Industries manufactures and sells high-priced motorcycles. The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division. It has been decided that the Engine Division will sell 25000 units to the Production Division at 1050 a unit. The Engine Division, currently operating at capacity, has a unit sales price of $2550 and unit variable costs and fixed costs of $1050 and $1500, respectively. The Production Division is currently paying $2400 per unit to an outside supplier. $120 per unit can be saved on internal sales from reduced selling expenses. What is the minimum transfer price that the Engine Division should accept? $2400$2430$2550$1500 Step by Step Solution
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