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Uma Corp. has two divisions: Parts and Assembly. The Parts Division makes Part B2 for sale to outside customers: Production capacity Demand from outside customers
Uma Corp. has two divisions: Parts and Assembly. The Parts Division makes Part B2 for sale to outside customers: Production capacity Demand from outside customers Per unit data for B2 for outside customers: 25,000 units per month 23,000 units per month Selling price Variable production cost Variable selling cost Allocated fixed cost $20.00 $15.00 $4.5 $1.25 The Assembly Division has designed a new product that also uses Part B2. For its new product, the Assembly Division would need 2,600 units of B2 each month, and the Parts Division would not incur variable selling costs for these units. Q) Assuming the Parts Division would cut back on sales to outside customers in order to supply B2 to the Assembly Division (if necessary), what is the lowest acceptable transfer price from the viewpoint of the selling division? (Do not round intermediate calculations. Round the final numbers to two decimal places.) A) $ per unit
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