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Bacot Products, Incorporated, has a Valve Division that manufactures and sells a number of products, including a standard that could be used by another division
Bacot Products, Incorporated, has a Valve Division that manufactures and sells a number of products, including a standard that could be used by another division in the company, the Pump Division, in one of its products. Data concerning that valve appear below: Capacity in units Selling price to outside customers Variable cost per unit Fixed cost per unit (based on capacity) 60,000 $ 53 $ 28 $ 17 The Pump Division is currently purchasing 8,000 of these valves per year from an overseas supplier at a cost of $47 per valve. Assume that the Valve Division is selling all of the valves it can produce to outside customers. What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division
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