Reference no: EM132527947

The following data relates to Division A's manufacturing of a certain part.

Maximum production capacity 50,000 units. Selling price to outside customer $35. Variable cost/unit $26. Variable cost avoidable on intra-company transfer sales $2. Total fixed cost $200,000.

Division B of the same company would like to purchase 12,000 units from Division A. Division B can purchase the part from an outside supplier at a price of $30 per unit.

Question 1: What must be Division A's planned outside sales to external customers if the minimum transfer price per unit it is willing to accept from Division B for the transfer of 12,000 units is $27?

Group of answer choices

Option 1: 4,000 units

Option 2: none of the others is correct

Option 3: 8,000 units

Option 4: 46,000 units

Option 5: 42,000 units