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Question $4-$ Transfer Pricing

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Marks $5$

Sandbar Company, a division of Dudge Cars, produces automotive batteries.

Sandbar sells the batteries to its customers for $$82$ per unit.

The variable cost per unit is $$38,$ and fixed costs per unit are $$16.$

Top management of Dudge Cars would like Sandbar to transfer $30,000$ special,

high$-$performance batteries to another division within the company.

Sandbar's variable cost on these special batteries is $$52$ per unit. Sandbar is operating at full capacity.

Instructions

Calculate the minimum transfer price that Sandbar should accept.