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 500,000 and $8 of the total variable cost can be avoided on an intracompany sale, calculate the

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

		$47
		$55
		$62
		$142
		$150