The Transmission Division is currently purchasing 6,000 of these connectors per year from an overseas supplier...

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• The Transmission Division is currently purchasing 6,000 of these connectors per year from an overseas supplier at a cost of $65 per connector. • The Connector Division has enough idle capacity to handle all of the Transmission Division's needs. Capacity in units Selling price to outside customers Variable cost per unit Fixed cost per unit (based on capacity) 66,000 $ 69 $ 21 $35 What should be the minimum acceptable transfer price for the connectors from the standpoint of the Connector Division? $21 per unit $69 per unit $65 per unit $56 per unit • The Transmission Division is currently purchasing 6,000 of these connectors per year from an overseas supplier at a cost of $65 per connector. • The Connector Division has enough idle capacity to handle all of the Transmission Division's needs. Capacity in units Selling price to outside customers Variable cost per unit Fixed cost per unit (based on capacity) 66,000 $ 69 $ 21 $35 What should be the minimum acceptable transfer price for the connectors from the standpoint of the Connector Division? $21 per unit $69 per unit $65 per unit $56 per unit

Answer rating: 100% (QA)

Solution The correct answer is 21 Explanation In case where the one division has un... View the full answer