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Division X manufactures a part that it sells to customers outside the company. The data related to this part appear below: Sale price to external

Division X manufactures a part that it sells to customers outside the company. The data related to this part appear below:

Sale price to external customers$75
Variable cost per unit$50
Total fixed costs$400,000
capacity in units25,000

Division Y of the same company would like to use the part made by Division X in one of its products. Division Y currently purchases a similar part made by an outside company at $70 per unit and would replace the part made by Division X. Division Y requires 5,000 units of the part each period. Division X can now sell all the units it can produce in the foreign market. What should be the lowest acceptable transfer price from an X Division perspective?

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