The Wood Division of Swifty Corporation manufactures rubber moldings and sells them externally for $55. Its variable cost is $25 per unit, and its fixed cost per unit is $9. Swifty’s president wants the Wood Division to transfer 6000 units to another company division at a price of $34. Assuming the Wood Division does not have any available capacity, the minimum transfer price it should accept is $34. $9. $25. $55.

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 18E: A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price...
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The Wood Division of Swifty Corporation manufactures rubber moldings and sells them externally for $55. Its variable cost is $25 per unit, and its fixed cost per unit is $9. Swifty’s president wants the Wood Division to transfer 6000 units to another company division at a price of $34.

Assuming the Wood Division does not have any available capacity, the minimum transfer price it should accept is

$34.
$9.
$25.
$55.
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