Slling price to outside customer 40 Varialbe cost per unit 30 Fixed cost total 10000 Capacity in(units 200

Assume that Division A is selling all it can produce to outside customers. If it sells to Division B, $1 can be avoided in variable cost per unit. Division B is presently purchasing from an outside supplier at $38 per unit. From the point of view of the company as a whole, any sales to Division B should be priced at:

		$40.
		$39.
		$38.
		$37.
		The company would not want the transfer to take place