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The Hinges Division of Altoona Corporation sells 100,000 units of part Z-25 to the outside market. Part Z-25 sells for $80 and has a variable
The Hinges Division of Altoona Corporation sells 100,000 units of part Z-25 to the outside market. Part Z-25 sells for $80 and has a variable cost per unit of $42 and a fixed cost per unit of $10. The Hinges Division has a capacity to produce 150,000 units per period. The Door Division currently purchases 30,000 units of part Z-25 from the Hinges Division for $60. The Door Division has been approached by an outside supplier willing to supply the parts for $56. If Altoona uses a negotiated transfer pricing system, what is the minimum transfer price that should be charged for this transaction? Multiple Choice O $52. $60. O o $42. O $56
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