Question
Sunfyre's Bakery Division is currently purchasing organic heavy cream from an outside supplier. The company's Dairy Division, which has no excess capacity, makes and sells
Sunfyre's Bakery Division is currently purchasing organic heavy cream from an outside supplier. The company's Dairy Division, which has no excess capacity, makes and sells organic heavy cream for external customers at a variable cost of $36 per gallon and a selling price of $50 per allon. If the Dairv Division beains sales to the Bakery Division. it will use the general transfer-pricing rule and will be able to reduce variable cost on internal transfer by $6 per gallon. How much is the minimum transfer price per gallon that the Dairy Division should establish?
(Do not round intermediate calculations. Round the final answer to the nearest two decimal places.)
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