Selling price to outside customers

Variable cost per unit

$$72$

Total fixed costs

$$62$

Capacity in units

$$150,000$

$25,000$

Division $Y$ of the same company would like to use the part manufactured by Division $x$ in one of its

products.

Division Y currently purchases a similar part made by an outside company for $$69$ per unit and would

require $5,000$ units of the part each period.

Division X$\text{'}$s current demand for the part is $24,000$ units, and if it filled Division Y$\text{'}$s order it would

lose $4,000$ sales to external customers

For this situation, what is the Seller's lowest acceptable transfer price and the Buyer's highest acceptable

transfer price?

None of these

lowest transfer price $=$$$10$ and highest transfer price $=$$$69$

$=>$

lowest transfer price $=$$$70$ and highest transfer price $=$$$69$

$x$

lowest transfer price $=$$$72$ and highest transfer price $=$$$79$

lowest transfer price $=$$$62$ and highest transfer price $=$$$72$