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4 Dewie Co makes components which it sells internally to its subsidiary Louie Co, as well as to its own external market. The external market
4 Dewie Co makes components which it sells internally to its subsidiary Louie Co, as well as to its own external market. The external market price is $30.00 each unit, which yields a contribution of 40% of sales. For external sales, variable costs include $2.50 each unit for distribution costs, which are not incurred on internal sales. Dewie Co has sufficient capacity to meet all of the internal and external sales. In order to maximise group profit, the component should be transferred to Louie Co at a price for each unit of: ABCD$30.00$27.50$15.50$9.50
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