Question - You have been provided with the following information for Division X of a decentralized company:
|
Selling price
|
$45
|
|
Variable cost per unit
|
33
|
|
Fixed cost per unit
|
12
|
|
Sales volume (units)
|
22,500
|
|
Capacity (units)
|
25,000
|
Division W would like to purchase all of its units internally. Division W needs 6,000 units each period and currently pays $42 per unit to an outside firm. What is the lowest price that Division X could accept from Division W?
$45.
$42.
$40.
$33.