Question
Micah Corporation has two divisions, A and B. The following information is provided for Division A: Unit selling price $ 84 Unit variable costs $
Micah Corporation has two divisions, A and B. The following information is provided for Division A: Unit selling price $ 84 Unit variable costs $ 47 Unit fixed costs $ 27 Division B uses the type of product produced by Division A and has approached Division A about buying the product internally. Division B is currently paying $62 to purchase the product from an outside source. If Division A sells internally, it can save $9.50 per unit in variable costs. Assuming Division A is operating at capacity, what price should it charge Division B if the transfer is to be made?
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