Whitney Company treats each division as a profit center and expects a 20 percent profit on its total production costs. Division A produces a part that it sells externally for $19.00. It also supplies this part to other internal divisions. Its variable production cost for the part is $13.70. Using a negotiated-price approach, what is the negotiation floor for Division A?
A) $13.70
B) $16.35
C) $16.44
D) $17.72
A
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