(see image attached)

What is the minimum transfer price on part (a)?

a. $16

b. $18

c. $20

d. $22

P22-5A Gutierrez Company makes various electronic products. The company is divided into a number of autonomous divisions that can either sell to internal units or sell exter- nally. All divisions are located in buildings on the same piece of property. The Board Divi- sion has offered the Chip Division $21 per unit to supply it with chips for 40,000 boards. It has been purchasing these chips for $22 per unit from outside suppliers. The Chip Divi- sion receives $22.50 per unit for sales made to outside customers on this type of chip. The variable cost of chips sold externally by the Chip Division is $14.50. It estimates that it will save $4.50 per chip of selling expenses on units sold internally to the Board Division. The Chip Division has no excess capacity