Post Division:

Quantity demanded by outside customers 500,000 posts

Quantity wanted by Lamp Division 25,000 posts

Selling price per post to outside customers $150

Variable cost per post $ 55

Fixed operating costs per unit (at capacity) $ 15

Capacity is 800,000 and none of the variable cost can be avoided on an intracompany sale.

What is the minimum transfer price per post that the Post division should charge the Lamp Division.

		$47
		$55
		$62
		$70
		$150