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Fragmented Company has two divisions, A and B. Division A makes a part that Division B currently purchases from an outside supplier for $80. Division

Fragmented Company has two divisions, A and B. Division A makes a part that Division B currently purchases from an outside supplier for $80. Division B approaches Division A to purchase the product internally.

Cost information on this part for Division A is as follows:

Variable manufacturing cost : $60 per unit

Variable selling costs: $20 per part

Fixed costs: $15 per unit

Division A is operating at full capacity and sells all of its output to external customers for $102 per part.

Calculate the minimum amount that Division A would accept to transfer the part to Division B.

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