Assume a company has two divisions, Division B and Division C. Division B has provided...
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Assume a company has two divisions, Division B and Division C. Division B has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on the outside market) $ 60 Variable cost per unit $ 44 Fixed costs per unit (based on capacity) $ 8 Capacity in units 20,000 Division C could use Division Bs product as a component part in the manufacture of 4,000 units of its own newly-designed product. Division C has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division B makes. If the companys divisional managers are evaluated based on their divisions profits and Division B is currently selling 15,000 units on the outside market, what is Division Cs highest acceptable transfer price if it were to buy 4,000 units from Division B? Multiple Choice $48 $52 $44 $58
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