The Can Division of Waterway Industries manufactures and sells tin cans externally for $0.70 per...
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Accounting
The Can Division of Waterway Industries manufactures and sells tin cans externally for $0.70 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.07, respectively. The Packaging Division wants to purchase 50,000 cans at $0.31 a can. Selling internally will save $0.02 a can. Assuming the Can Division is already operating at full capacity, what is the minimum transfer price it should accept?
$0.33
$0.39
$0.64
$0.68
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