39. Division 1 of Ace Company makes and sells wheels that can either be sold to outside customers or transferred to Division 2. The following data are available from last month:

Selling price to outside customers	$	50		per unit
Variable cost when sold to outside customers	$	35		per unit
Capacity		15,000		units

Division 2:

Number of wheels needed per month		5,000		units
Price per wheel paid to an outside supplier	$	47		per unit

If Division 1 sells the wheels to Division 2, Division 1 can avoid $2 per unit in sales commissions. Suppose that Division 1 sells 11,500 units each month to outside customers. According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

A. $47.00 per unit

B. $43.50 per unit

C. $37.50 per unit

D. $34.73 per unit