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Explain why the answer is 10 here Division A produces a product that it sells to the outside market. It has compiled the following: Variable
Explain why the answer is 10 here
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 Total fixed manufacturing costs $150,000 Total fixed selling costs $30,000 Per unit selling price to outside buyers $40 Capacity in units per year 30,000 12. Division B of the same company is currently buying an identical product from an outside provider for $38 per unit. It wishes to purchase 5,000 units per year from Division A. Division A is currently selling 25,000 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? a. $10 b. $11 c. $38 d. $40Step by Step Solution
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