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Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 195,000 gadgets for
Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 195,000 gadgets for $14.40 on the open market. Daffodil's variable costs are $8 per widget while the full cost is $12.20. Daffodil sells gadgets for $14.90 each. If Daffodil is operating at capacity, what would be the minimum transfer price Daffodil would accept for an internal transfer? Multiple Choice $7.90 $14.90 $12.20 $14.40
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