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Division A produces a product that it sells to the outside market. It has compiled the following: Variable manufacturing cost per unit $10 Variable selling
Division A produces a product that it sells to the outside market. It has compiled the following: Variable manufacturing cost per unit $10 Variable selling costs per unit $3 Total fixed manufacturing costs $170000 Total fixed selling costs $30000 Per unit selling price to outside buyers $46 Capacity in units per year 30000 Division B of the same company is currently buying an identical product from an outside provider for $44 per unit. It wishes to purchase 4200 units per year from Division A. Division A is currently selling 30000 units of the product per year. If the internal transfer is made, Division A will not incur any selling costs. What would be the minimum transfer price per unit that Division A would be willing to accept? $46 $11 $10 $44
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