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Division 1 of Ace Compagy makes and sells wheels that can either be sold to outside customers or transferred to Division 2. The following data
Division 1 of Ace Compagy makes and sells wheels that can either be sold to outside customers or transferred to Division 2. The following data are available from last month: Division 1 Selling price to outside customers Verlable cost when sold to outside customers Capacity $ 60 per unit $ 42 per unit 10.000 units Division 2 Number of wheels needed per month Price per Wheel paid to an outside supplier $ 3.200 units 57 per unit Division 1 seis the wheels to Division 2. Division 1 can avoid $110 per unit in sales commissions Suppose that Division 1 sells 4,800 units per month to outside customers. According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division if Division 2 requires 3,200 units per month from Division 12 $5700 per unit $60.00 per unit $42.00 per unit $40.90 per unit
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