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What is the minimum price that division maysa should charge

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Question - Division Maysa of BabyEm Un3 Company is currently operating at 70% capacity. It produces a single product and sells all its production to outside customers for P70 per unit. Variable costs is P30 per unit and fixed cost is P20 per unit at the current production level. Division Duwa, which currently buys the same product from an outside supplier for P65 per unit, would like to buy the product from Division Maysa. Division Maysa will use one-half of its idle capacity if it decides to provide the requirements of Division Duwa. What is the minimum price that division Maysa should charge Division Duwa for this product?

Reference no: EM133188144

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