Division b uses the type of product produced by division a

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Reference no: EM13595201

Horton Corporation has two operating divisions, A and B. The following information is provided for Division A:

Unit selling price
$74
Unit variable costs
$42
Unit fixed costs
$22

Division B uses the type of product produced by Division A and has approached Division A about buying the product internally. Division B is currently paying $57 to purchase the product from an outside source. If Division A sells internally it can save $7.0 per unit in variable costs. Assuming Division A is operating at capacity, what price should it charge Division B if the transfer is to be made?

Reference no: EM13595201

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