Find out the minimum transfer price


Question: The Wood Division of Swifty Corporation manufactures rubber moldings and sells the product externally for $52. Its unit variable cost is $36 and its unit fixed cost is $6. Swifty's president wants the Wood Division to transfer 8000 units to another company division at a price of $42. Current sales are 8000 units. Assuming the Wood Division has available capacity of 8000 units, the minimum transfer price it should accept is

 

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Accounting Basics: Find out the minimum transfer price
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