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Maverick corporation, a division of Country Motors, manufactures car audio systems and sells them to other divisions of Country Motors as well as to other
Maverick corporation, a division of Country Motors, manufactures car audio systems and sells them to other divisions of Country Motors as well as to other vehicle manufacturers and stores. Maverick's standard unit has the following costs: variable cost per unit $31, fixed cost per unit $23, and selling price to outside customers $85. Country Motors currently purchases a standard audio unit from an outside supplier for $80. Because of quality concerns, top management has ordered Maverick to provide 200,000 units at a transfer price of $30 per unit. Maverick only has 150,000 units of available capacity and would have to forego sales to external customers for the remaining 50,000 units. Maverick would avoid $2 of variable selling costs per unit if it sold internally. What is the minimum transfer price that Maverick should accept
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