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Division B has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on

Division B has provided the following information regarding the one product that it manufactures and sells on the outside market:

Selling price per unit (on the outside market) $ 60
Variable cost per unit $ 44
Fixed costs per unit (based on capacity) $ 8
Capacity in units 20,000
  • Division C could use Division Bs product as a component part in the manufacture of 4,000 units of its own newly-designed product.
  • Division C has received a quote of $58 from an outside supplier for a comparable part

If Division B is currently selling 15,000 units on the outside market, what is Division Bs lowest acceptable transfer price if it were to sell 4,000 units to Division C?

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