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Business, 22.07.2019 20:10 shamim5364

The bathtub division of kirk plumbing corporation has recently approached the faucet division with a proposal. the bathtub division would like to make a special "ivory" tub with gold-plated fixtures for the company's 50-year anniversary. it would make only 5,000 of these units. it would like the faucet division to make the fixtures and provide them to the bathtub division at a transfer price of $160. if sold externally, the estimated variable cost per unit would be $140. however, by selling internally, the faucet division would save $6 per unit on variable selling expenses. the faucet division is currently operating at full capacity. its standard unit sells for $50 per unit and has variable costs of $29. compute the minimum transfer price that the faucet division should be willing to accept.

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