Question
Division A of the Yogurt Corporation manufactures product A. The division has no idle capacity and can sell all it can produce at $39 per
Division A of the Yogurt Corporation manufactures product A. The division has no idle capacity and can sell all it can produce at $39 per unit. Division B would like to purchase 5,000 units of A from Division A and is negotiating the transfer price. Division A normally has to pay $9 in transportation costs to sell to third-parties. It would not have to pay the $9 in transportation costs if it were to sell the units to Division B. What is the appropriate transfer price for each of the units, assuming Division A sells internally?
Group of answer choices
$30
$48
$9
$39
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