Fingado Products, Inc., has a Detector Division that manufactures and sells a number of products, including a standard detector that could be used by another division in the company, the Commercial Security Division, in one of its products. Data concerning that detector appear below: Capacity in units 87,000Selling price to outside customers$98Variable cost per unit$32Fixed cost per unit (based on capacity)$51?The Commercial Security Division is currently purchasing 6,000 of these detectors per year from an overseas supplier at a cost of $91 per detector.?Assume that the Detector Division is selling all of the detectors it can produce to outside customers. What should be the minimum acceptable transfer price for the detectors from the standpoint of the Detector Division?
A. $83 per unit
B. $32 per unit
C. $98 per unit
D. $91 per unit
Answer: C
Business
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