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The Heating Division of Blue Spruce International produces a heating element that it sells to its customers for $48 per unit. Its unit variable cost
The Heating Division of Blue Spruce International produces a heating element that it sells to its customers for $48 per
unit. Its unit variable cost is $21, and its unit fixed cost is $6. Top management of Blue Spruce International would like
the Heating Division to transfer 14,800 heating units to another division within the company at a price of $25. The
Heating Division is operating at full capacity. What is the minimum transfer price that the Heating Division should
accept?
Minimum transfer price
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