Given the following data for Division A: Assume that Division A is selling all it can produce to outside customers.If it sells to Division B,$1 can be avoided in variable cost per unit.Division B is presently purchasing from an outside supplier at $38 per unit.From the point of view of the company as a whole,any sales to Division B should be priced at:
A)$40.
B)$39.
C)$38.
D)$37.
E)The company would not want the transfer to take place.

Question

Given the following data for Division A:  Assume that Division A is selling all it can produce to outside customers.If it sells to Division B,$1 can be avoided in variable cost per unit.Division B is presently purchasing from an outside supplier at $38 per unit.From the point of view of the company as a whole,any sales to Division B should be priced at:
A)$40. 
B)$39. 
C)$38. 
D)$37. 
E)The company would not want the transfer to take place.

Quizplus · Accepted Answer

The Answer of Given the following data for Division A:  Assume that Division A is selling all it can produce to outside customers.If it sells to Division B,$1 can be avoided in variable cost per unit.Division B is presently purchasing from an outside supplier at $38 per unit.From the point of view of the company as a whole,any sales to Division B should be priced at:
A)$40. 
B)$39. 
C)$38. 
D)$37. 
E)The company would not want the transfer to take place.

Given the Following Data for Division A: Assume That