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Determine the minimum transfer price

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Reference no: EM132820877

Question - Goldwasser Industries has two divisions, the Lauren Division and the Lindsey Division. Information about a component that the Lauren Division produces is as follows:

Revenue $100 per unit

Variable manufacturing costs $25 per unit

Fixed manufacturing overhead $15 per unit

Expected sales in units 7,000 units

The Lauren Division can produce up to 8,000 components per year. The Lindsey Division needs 500 units of the component for a product it manufactures.

Determine the minimum transfer price that the Lauren Division would accept.

Reference no: EM132820877

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