The e-Learning division of Smart Touch Learning develops and sells online courses in accounting, marketing, and management. The courses sell for $100 each. The variable cost per unit is $40, and the fixed production cost per unit is $15. The tablet computer division is currently purchasing these courses from an outside vendor at a cost of $96. Assume that the e-Learning division can sell all of the courses it produces.

What is the lowest acceptable transfer price the e-Learning division will accept from the tablet division for 3,000 units if it is operating at full capacity?

Multiple Choice

• $40

• $55

• $80

• $100