Unit selling price $167 Unit variable costs $117 Unit fixed costs $ 37
Division B uses the type of product produced by Division A and has approached Division A about buying the product internally. Division B is currently paying $162
to purchase the product from an outside source. If Division A sells internally it can save $18.5 per unit in variable costs. Assuming that Division A has
sufficient excess capacity to produce all of the units requested by Division B which of the following is the lowest price Division A should consider for the
transfer?
$117.00 $148.50 $162.00 $98.50