Question $4$ of $4$

$\frac{-}{25}$

View Policies

Current Attempt in Progress

The Bathtub Division of Blue Spruce Plumbing Corporation has recently approached the Faucet Division with a proposal. The Bathtub Division would like to make a special "ivory" tub with gold$-$plated fixtures for the company's $50-$year anniversary. It would make only $4,100$ of these units. It would like the Faucet Division to make the fixtures and provide them to the Bathtub Division at a transfer price of $$131.$ If sold externally, the estimated unit variable cost would be $$115.$ However, by selling internally, the Faucet Division would save $$6$ per unit on variable selling expenses. The Faucet Division is currently operating at full capacity. Its standard unit sells for $$41$ per unit and has variable costs of $$24.$

Compute the minimum transfer price that the Faucet Division should be willing to accept.

Minimum transfer price $

Should they accept this offer?

They this offer.

eTextbook and Media

Save for Later

Attempts: $0$ of $5$ used