The Engine Division of the Taylor Corporation sells small engines to the outside market at a selling price of $142 per engine. The Engine Division is currently operating at a capacity of 47263 engines per year and is currently selling 37504 engines annually. The variable cost of producing an engine is $105. The Snowmobile Division of the Taylor Corporation currently purchases 19052 engines from an external supplier at a cost of $146 per engine.

What is the minimum transfer price for a transfer of 19052 engines from the Engine Division to the Snowmobile Division?

Select one:

a. $123.95

b. $105.00

c. $123.05

d. $146.00

The Bolton Corporation has 2 divisions. The Ramsay division is currently producing 4066 units (at capacity), all sold to an external market at $29.65 each. The Theon division needs 1257 units from Ramsay. Ramsays variable costs per unit are $5.95 and fixed costs at current production levels are $6.89 per unit. What is the minimum transfer price?

Select one:

a. $12.84

b. $23.70

c. $29.65

d. $5.95