The Wood Division of Fir Products, Inc. manufactures rubber moldings and sells them externally for $55. Its variable cost is $25 per unit, and its fixed cost per unit is $7. Fir's president wants the Wood Division to transfer 5,000 units to another company division at a price of $32. Assuming the Wood Division does not have any available capacity, the minimum transfer price it should accept is:
A. $7.
B. $25.
C. $32.
D. $55.

Question

24-07-2024
Business

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The Wood Division of Fir Products, Inc. manufactures rubber moldings and sells them externally for $55. Its variable cost is $25 per unit, and its fixed cost per unit is $7. Fir's president wants the Wood Division to transfer 5,000 units to another company division at a price of $32. Assuming the Wood Division does not have any available capacity, the minimum transfer price it should accept is:
A. $7.
B. $25.
C. $32.
D. $55.

Sagot :

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