The Wood Division of Fir Products, Inc. manufactures wood moldings and sells them externally for $165. Its variable cost is $75 per unit, and its fixed cost per unit is $21. Fir's president wants the Wood Division to transfer 5,000 units to another company division at a price of $96.
Q: Assuming the Wood Division has available capacity of 5,000 units, the minimum transfer price it should accept is:
A) $96 B) $165 C) $75 D) $21
Q: Assuming the Wood Division does not have any available capacity, the minimum transfer price it should accept is:
A) $96 B) $165 C) $75 D) $21