Division A has variable manufacturing costs of $53 per unit and fixed costs of $14 per unit. Assuming that Division A is operating significantly below capacity, what is the optimal transfer price of an internal transfer when the market price is $80?

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•  Division B has variable manufacturing costs of $58 per unit and fixed costs of $14 per unit. Assuming that Division B is operating significantly below capacity, what is the opportunity cost of an internal transfer when the market price is $88?

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Answer rating: 100% (QA)

To determine the optimal transfer price for Division A we need to consider the variable man... View the full answer