Reference no: EM132792621

Division A of Sebastian Enterprises manufactures a product called XYZ. Current data for Division A are as follows:

Capacity                                    59943

Current production & sales              50873

Per unit data

Selling price                                     $94.24

Variable costs - production                     32.20

Variable costs - marketing relating to external sales  14.59

Fixed costs (total)                                        $772719

problem 1: Division B of Sebastian Enterprises currently buys 20592 units of XYZ yearly from an outside supplier at a price of $55.00. Division B would like to buy the 20592 units of XYZ it needs annually from Division A. What is the minimum transfer price?

Select one:

a. $32.20
b. $51.54
c. $73.34
d. $58.75