Appendix 11A) Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling Price to Outside Customers $75 Variable Cost per Unit $50 Total Fixed Costs $400,000 Capacity in Units 25,000 Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $70 per unit and would substitute the part made by Division X. Division Y requires 5,000 units of the part each period. Division X can already sell all of the units it can produce on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X? Multiple Choice $16 $50 $66 $75

(Appendix 11A) Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling Price to Outside Customers Variable Cost per Unit Total Fixed Costs Capacity in Units $75 $50 $400,000 25.000 Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $70 per unit and would substitute the part made by Division X. Division Y requires 5,000 units of the part each period. Division X can already sell all of the units it can produce on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X? Multiple Choice O $16 $50 O O $66 O $75