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What is the lowest price that division x

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Reference no: EM132418625

Problem: Information for Division X of a decentralized company:

Selling price 105

Variable cost per unit 48

Fixed cost per unit 20

Sales volume (units) 21,200

Capacity (units) 24,500

Division Y of the same company would like to purchase all of its units internally. Division Y needs 9,900 units each period and currently pays $99 per unit to an outside firm. (Assume that Division Y wants to use a sole supplier and will not purchase less than 9,900 from a supplier.) What is the lowest price that Division X could accept from Division Y?

Reference no: EM132418625

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