Division X (selling) is considering an internal transfer to Division Y (buying). The per-unit costs...
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Division X (selling) is considering an internal transfer to Division Y (buying). The per-unit costs that may incur are as follows:
| $ | 70.00 | variable manufacturing cost |
| $ | 2.50 | shipping cost |
| $ | 5.00 | handling cost, including $2 fixed cost |
| $ | 4.50 | other miscellaneous cost, paid by the Buying Division |
The opportunity cost is zero. What is the minimum transfer price that Division X should charge?
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