Division A of Chappelle Company has the capacity for making 3,800 motors per month and regularly sells 2,150 motors each month to outside customers at a contribution margin of $70 per motor. The variable cost per motor is $43.70. Division B of Chappelle Company would like to obtain 2,200 motors each month from Division A. What should be the lowest acceptable transfer price from the perspective of Division A?

Multiple Choice

• $36.57.

• $70.00.

• $43.70.

• $61.20.