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The Wood Division of Fir Products, Inc. manufactures wood mouldings and sells them externally for $200. Its variable cost is $48 per unit, and its fixed cost per unit is $15. Fir's president wants the Wood Division to transfer 5400 units to another company division at a price of $63.
Question 1: Assuming the Wood Division does not have any available capacity, the minimum transfer price it should accept is
Option a) $15.
Option b) $48.
Option c) $63.
Option d) $200.
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