Perrin Co has 2 divisions, A and B. Division A has limited skilled labour and is operating at full capacity making product Y. It has been asked to supply a different product, X to Division B. Division B currently sources this product externally for $700 per unit. The same grade of materials and labour is used in both products. The cost card is below : Product Y.X Selling price $600. - materials ($50 per kg) - $200.$150 Labour ($20 per hr) - $80.$120 Fixed overhead ($15 per hr) - $60.$90

Using opportunity cost approach to transfer pricing, what is the minimum transfer price?

Please explain your answer with workings and the reasoning behind it. Thanks.