What minimum transfer price the gear division should accept


Problem: The Gear Division of Bicycle Bob produces a 12-speed gear that it sells to its customers for $28 per unit. Its unit variable cost is $ 4.85, and its unit fixed cost is $3.79. Top management of Bicycle Bob would like the Gear Division to transfer 4,000 gears to another division within the company at a price of $26. The Gear Division has no excess capacity to provide the units. What is the minimum transfer price that the Gear Division should accept? (Round answer to 2 decimal places)

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Accounting Basics: What minimum transfer price the gear division should accept
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