Q18

Division A produces a product that it sells to the outside market. It has compiled the following: $12 $3 Variable manufacturing cost per unit Variable selling costs per unit Total fixed manufacturing costs Total fixed selling costs Per unit selling price to outside buyers $149000 $30000 $50 Capacity in units per year 30000 Division B of the same company is currently buying an identical product from an outside provider for $48 per unit. It wishes to purchase 5500 units per year from Division A. Division A is currently selling 30000 units of the product per year.If the internal transfer is made Division A will not incur any selling costs. What would be the minimum transfer price per unit that Division A would be willing to accept? O $12 O $48 $50 $13