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Division A of LKR Corp. sells one of its components to other companies for $87.20 per unit. According to LKR's accounting system, Division A's unit
Division A of LKR Corp. sells one of its components to other companies for $87.20 per unit. According to LKR's accounting system, Division A's unit manufacturing costs for the component are: Direct $42.70 materials Direct labor $5.80 Variable $9.60 overhead Fixed $4.50 overhead Division B of LKR Corp. could use Division A's component in one of its products. Division B currently buys this component from an outside supplier for $79.95 per unit and incurs variable purchasing costs of $5 per unit for every component purchased externally. What is the highest transfer price Division B would be willing to pay Division A for its component? O $87.20 per unit $84.95 per unit O $58.10 per unit O $79.95 per unit None of the above
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