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The fastener division of Northern Textile Industries manufactures zippers and then sells them to customers for $10 per unit. Its variable cost is $3 per
The fastener division of Northern Textile Industries manufactures zippers and then sells them to customers for $10 per unit. Its variable cost is $3 per unit, and its fixed cost per unit is $1.50. Management would like the fastener division to transfer 12,900 of these zippers to another division within the company at a price of $3. The fastener division could avoid $0.20 per zipper of variable packaging costs by selling internally.
Determine the minimum transfer price, assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, eg. 15.25.) $ $ Minimum transfer priceStep by Step Solution
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