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Can someone please give a detailed solution to this question? The answer is D) $23 but I don't know how to get that answer. Please
Can someone please give a detailed solution to this question? The answer is D) $23 but I don't know how to get that answer. Please help. 15. Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows: Annual production capacity Selling price of the item to outside customers Variable cost per unit Fixed cost per unit 80,000 units S 35 S 23 S 5 Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. If outside customers demand only 50,000 units per year, then what is the lowest acceptable transfer price from the viewpoint of the selling division? A. $35 B. $33 C. $28 D. $23 E. None of the abave
Can someone please give a detailed solution to this question? The answer is D) $23 but I don't know how to get that answer. Please help.
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