The Counter Division can sell externally for $60 per unit. Its variable manufacturing costs are $35 per unit, and its fixed costs are $12 per unit.
Required:
(a) What is the optimal transfer price for transferring internally, assuming the division is operating at capacity?
(b) What is the optimal transfer price for transferring internally, assuming the division is operating at well below capacity?

Question

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The Answer of The Counter Division can sell externally for $60 per unit. Its variable manufacturing costs are $35 per unit, and its fixed costs are $12 per unit.
Required:
(a) What is the optimal transfer price for transferring internally, assuming the division is operating at capacity?
(b) What is the optimal transfer price for transferring internally, assuming the division is operating at well below capacity?

The Counter Division Can Sell Externally for $60 Per Unit