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Assume a company has two divisions, Division C and Division D. Division C has provided the following information regarding the one product that it manufactures

Assume a company has two divisions, Division C and Division D. Division C has provided the following information regarding the one product that it manufactures and sells on the outside market:

Selling price per unit (on the outside market) $ 60
Variable cost per unit $ 44
Fixed costs per unit (based on capacity) $ 8
Capacity in units 20,000

Division D could use Division Cs product as a component part in the manufacture of 4,000 units of its own newly-designed product. Division D has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division C makes. If the companys divisional managers are evaluated based on their divisions profits and Division C is currently selling 15,000 units on the outside market, what is Division Ds highest acceptable transfer price if it were to buy 4,000 units from Division C?

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