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Schwinn Company specializes in making and selling recreational equipment. Its Tire Division makes tires that is sells for bicycles and reports the following information: sales

Schwinn Company specializes in making and selling recreational equipment. Its Tire Division makes tires that is sells for bicycles and reports the following information: sales price per tire of $20; variable cost per tire of $8; and contribution margin per tire of $12. Schwinn's Bike Division can purchase similar tires from an outside vendor for $17. What is the maximum transfer unit price that the Bike Division should consider for purchasing tires from the Tire Division?

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