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  3. division g makes a part that it sells to customers

Division G makes a part that it sells to customers outside of the company. Data...

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Accounting

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Division G makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling price to outside customers $ 87 Variable cost per unit $ 49 Total fixed costs $ 40,000 Capacity in units 4,000 Division H of the same company would like to use the part manufactured by Division G in one of its products. Division H currently purchases a similar part made by an outside company for $83 per unit and would substitute the part made by Division G. Division H requires 500'units of the part each period. Division G has some idle capacity. It can produce the units for Division H without any increase in fixed costs but would result in sacrificing 200 units of regular sales to outside customers. If Division G sells to Division H rather than to outside customers, the variable cost be unit would be $2 lower. What should be the lowest acceptable transfer price from the perspective of Division G

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