Steinhoff Products, Inc., has a Sensor Division that manufactures and sells a number of products, including a standard sensor that could be used by another division in the company, the Safety Products Division, in one of its products. Data concerning that sensor appear below: Capacity in units 51,000Selling price to outside customers$56Variable cost per unit$37Fixed cost per unit (based on capacity)$14?The Safety Products Division is currently purchasing 4,000 of these sensors per year from an overseas supplier at a cost of $48 per sensor.?What is the maximum price that the Safety Products Division should be willing to pay for sensors transferred from the Sensor Division?
A. $14 per unit
B. $51 per unit
C. $37 per unit
D. $48 per unit
Answer: D
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