Division A, operating at full capacity, manufactures an aircraft engine component with unit variable product cost of

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Division A, operating at full capacity, manufactures an aircraft engine component with unit variable product cost of $38 and market price of $50. Division A incurs shipping costs of $3 per unit for sales to outside parties only. Division B uses this component in the manufacture of its own engine production activities. Top management allows negotiated transfer pricing. The maximum transfer price (the ceiling of the bargaining range) is
  a.  $38.
  b.  $50.
  c.  $44.
  d.  $47.
  e.  There is no bargaining range.

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