Division A makes a part with the following characteristics:

production capacity in units..................15,000 units

selling price to outside customers..........$25

variable cost per unit..............................$18

Total fixed costs......................................$60,000

Division B, another division of the same company, would like to purchase 5,000 units of the part each period from Division A.Division A is currently selling 10,000 units to its outside customers.

What should be the lowest acceptable transfer price from the perspective of Division A?

IF the transfer is made, variable costs will decrease by $2 per unit.What should be the lowest acceptable transfer price from the perspective of Division A?

Division B, another division of the same company, would like to purchase 5,000 units of the part each period from Division A.Division A is currently selling 15,000 units to its outside customers.

What should be the lowest acceptable transfer price from the perspective of Division A?

IF the transfer is made, variable costs will decrease by $2 per unit.What should be the lowest acceptable transfer price from the perspective of Division A?

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