The Rubber Division of Morgain Company manufactures rubber moldings and sells them externally for $40.At the current level of production, itsvariable cost is $18 per unit, and its fixed cost per unit is $15. Morgain's president wants the Rubber Division to transfer 5,000 units to another company division.

Assuming the Rubber Division has available capacity for 5,000 additional units, the economic rule would set the transfer price as:

• $33
• $40
• $15
• $18