Compute what the minimum transfer price should accept is

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The Wood Division of Sunland Company manufactures rubber moldings and sells them externally for $50. Its variable cost is $30 per unit, and its fixed cost per unit is $5. Sunland's president wants the Wood Division to transfer 4300 units to another company division at a price of $23.

Problem 1: Assuming the Wood Division has available capacity of 4300 units, the minimum transfer price it should accept is

Option 1: $30.
Option 2: $5.
Option 3: $23.
Option 4: $50.

Reference no: EM132706328

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