Question
Turbo's P division has a maximum production capacity of 80,000 units and currently produces and sells 70,000 units annually in the external market at a
Turbo's P division has a maximum production capacity of 80,000 units and currently produces and sells 70,000 units annually in the external market at a regular price of $100. Division P's variable unit production cost is $60 and variable operating costs are $12 per unit.Turbo's Division Q currently purchases 40,000 units from an outside supplier at a price of $90 per unit. However, it only wants to offer a unit price of $85 to Division P. If transferred internally, Division P would save $3.5 per unit in variable operating costs. What is the minimum transfer price required by Division P? 92.125$ No answer is appropriate 93 $ 85$ 89.5 $
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