Hoo Headrests is a division of Wahoo Autos, an automobile manufacturer that

produces SUVs $($SUVHoo division$)$ and trucks $($TruckHoo Division$).$ Hoo produces

headrests that are used in both vehicle types and therefore sells its products to

both divisions as well as to other auto manufacturers. The division managers will

negotiate a transfer price. The following information pertains to the products of

Hoo Headrests:

Selling price of headrests to external customers

Unit variable cost

Capacity

$200,000$ units

Hoo Headrests is operating at full capacity $($therefore$,$ it has no excess capacity$).$ A

savings of $$4$ per unit will result if the headrests are sold internally. Wahoo Autos

can purchase a similar headrest from an outside vendor for $$57.$

What is the minimum transfer price?

$$56$

$$38$

$$60$

$$42$

$$18$

$$57$

$$45$Hoo Headrests is a division of Wahoo Autos, an automobile manufacturer that produces SUVs $($SUVHoo division$)$ and trucks $($TruckHoo Division$).$ Hoo produces headrests that are used in both vehicle types and therefore sells its products to both divisions as well as to other auto manufacturers. The division managers will negotiate a transfer price. The following information pertains to the products of Hoo Headrests:

Selling price of headrests to external customers $$60$

Unit variable cost $$42$

Capacity $200,000$ units

Hoo Headrests is operating at full capacity $($therefore$,$ it has no excess capacity$).$ A savings of $$4$ per unit will result if the headrests are sold internally. Wahoo Autos can purchase a similar headrest from an outside vendor for $$57.$

What is the minimum transfer price?

Group of answer choices

$$56$

$$38$

$$60$

$$42$

$$18$

$$57$

$$45$