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Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit
Assume Division A 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) Variable cost per unit Fixed costs per unit (based on capacity) Capacity in units $ 100 $ 65 $ 6 30,000 Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. The other division can either agree to a transfer price with Division A or purchase a comparable product on the outside market for $100. If Division A is currently selling 29,000 units on the outside market, what is the range of acceptable transfer prices between the two divisions? Multiple Choice $72 s Transfer price $100 Multiple Choice $72
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