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Pina Colada Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures...

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Accounting

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Pina Colada Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures vehicles. Pina Colada sells car stereos to Berna, as well as to other vehicle manufacturers and retail stores. The following information is available for Pina Colada's standard unit: unit variable cost $36, unit fixed cost $22, and unit selling price to outside customer $85. Berna currently purchases a standard unit from an outside supplier for $80. Because of quality concerns and to ensure a reliable supply, the top management of Berna has ordered Pina Colada to provide 204,000 units per year at a transfer price of $34 per unit. Pina Colada is already operating at full capacity. Pina Colada can avoid $3 per unit of variable selling costs by selling the unit internally. Answer each of the following questions. (a) Your answer is incorrect. What is the minimum transfer price that Pina Colada should accept

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