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Division X makes a part with the following characteristics: Production capacity in units Sales to outside customers Selling price to outside customers Variable cost per
Division X makes a part with the following characteristics: Production capacity in units Sales to outside customers Selling price to outside customers Variable cost per unit Total fixed costs 40,000 units 35,000 units $50 $30 $200,000 Division Y, another division of the same company, would like to purchase 4,000 units of the part each period from Division X. Division Y is now purchasing these parts from an outside supplier at a price of $48 each. Managers of each division are free to make decisions related to purchases and sales of its own products. The maximum transfer price is: $50. $30. $35. $48
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