Question
Oberley Products, Incorporated, has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another
Oberley Products, Incorporated, has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below:
Capacity in units | 47,000 |
---|---|
Selling price to outside customers | $ 67 |
Variable cost per unit | $ 33 |
Fixed cost per unit (based on capacity) | $ 19 |
The Industrial Products Division is currently purchasing 5,000 of these receivers per year from an overseas supplier at a cost of $58 per receiver.
What is the maximum price that the Industrial Products Division should be willing to pay for receivers transferred from the Receiver Division?
Multiple Choice
$52 per unit
$19 per unit
$58 per unit
$33 per unit
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