Knowledge Check

The Gear Division of Bicycle Bob produces a $12-$speed gear that it sells to its customers for $$23$ per unit. Its unit variable cost is $$4\mathrm{.}55,$ and its unit fixed cost is $$3\mathrm{.}82.$ Top management of Bicycle Bob would like the Gear Division to transfer $4,000$ gears to another division within the company at a price of $$21.$ The Gear Division has no excess capacity to provide the units. What is the minimum transfer price that the Gear Division should accept? $($Round answer to $2$ decimal places $($e$.$g$.,52\mathrm{.}75).)$

Minimum transfer price per unit