Discuss difference between the maximum and minimum prices

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Tito Motors Ltd operates as a decentralised multidivisional company. Division X purchases T4 components from the Division Y. Division Y's incremental cost for manufacturing the T4 components is $156 per unit. Division Y is currently working at 69% capacity selling all its production to Division X. The current market price of the T4 components is $231 per unit. If the transfer price is determined as a price that splits the difference between the maximum and minimum prices from the divisions' standpoint. What would be the resulting transfer price for T4 components (rounded using two decimals)?

Reference no: EM131807201

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