Toldness Products, Inc., has a Connector Division that manufactures and sells a number of products,...
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Accounting
Toldness Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below:
Capacity in units 57,000
Selling price to outside customers $ 67
Variable cost per unit $ 22
Fixed cost per unit (based on capacity) $ 29
The Transmission Division is currently purchasing 11,000 of these connectors per year from an overseas supplier at a cost of $58 per connector. What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?
Multiple Choice $22 per unit
$58 per unit
$51 per unit
$29 per unit
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