A firm produces uses negotiated transfer prices for its two departments: C and S. Department C transfers its output to Department S. Department S can purchase this output through the external market for $150 per unit.

Department C can sell its output to the external market for $90 per unit. It costs Department C $50 of variable costs per unit. It also costs Department C $20 per cubic foot to ship the output to buyers on the external market. The Department C has $10 of fixed costs per unit.

Department C has 4,000 units of excess capacity. Department S needs 5,000 units.

What is the minimum price that would be negotiated between these departments (round to the nearest cent if necessary)?

	a.	$50.00 per unit
	b.	$70.00 per unit
	c.	$54.00 per unit
	d.	$150.00 per unit