Maximum transfer price tulip would pay internally

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Reference no: EM13788091

Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 100,000 gadgets for $12.50 on the open market. Daffodil's variable costs are $6 per widget while the full cost is $9.35. Daffodil sells gadgets for $13 each. If Daffodil is operating at full capacity, what would be the maximum transfer price Tulip would pay internally?

A. $6.00 B. $9.35 C. $12.50 D. $13.00

Reference no: EM13788091

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