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Could you please explain how to get the answer highlighted? 37. Division A of Parker Inc. produces a component used in the production of the
Could you please explain how to get the answer highlighted? 37. Division A of Parker Inc. produces a component used in the production of the product manufactured by Division B. Currently Division A sells the component to external buyers for $12.00. Division A has variable manufacturing costs of $5.00 and fixed manufacturing costs of $3.00 per unit for the component. If Division A has excess capacity, the minimum transfer price per unit to be used with reference to an internal sale to Division B would be A $12.00 . $ 8.00 . $ 4.00 D $ 5.00
Could you please explain how to get the answer highlighted?
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