Question: The Upstart Shoe Company has two divisions stitching and soles

The Upstart Shoe Company has two divisions: stitching and soles. The soles division has a total cost of $15 per unit for its product, rubber soles, of which $10 is fixed. The soles division also has idle capacity for up to 25,000 units per month. The stitching division would like to purchase 20,000 units from the soles division but feels that the $15 price is too high.

Determine the lowest price the soles division can sell at without incurring additional losses.

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  • CreatedMarch 11, 2015
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