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A company has two divisions: Division X and Division Y. Both divisions are profit centers. Division X can produce up to 140468 kilograms of plastic
A company has two divisions: Division X and Division Y. Both divisions are profit centers. Division X can produce up to 140468 kilograms of plastic per year. Division Y needs 52583 kilograms of plastic in order to manufacture different products. The market price is $5.22 per kilogram of plastic. The following costs pertain to Division X: Variable manufacturing costs per kilogram$3.95 Fixed manufacturing costs per kilogram7.89 What is the minimum transfer price that Division X would be willing to receive for the 52583 kilograms sold to Division Y if Division X expects to be operating at full capacity this year? Select one: $7.89 $5.22 $11.84 $3.95
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