Toldness Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: Capacity in units 57,000Selling price to outside customers$67Variable cost per unit$22Fixed cost per unit (based on capacity)$29?The Transmission Division is currently purchasing 11,000 of these connectors per year from an overseas supplier at a cost of $58 per connector.?What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?
A. $51 per unit
B. $58 per unit
C. $29 per unit
D. $22 per unit
Answer: B
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