The Gear Division of Bicycle Bob produces a 12-speed gear that it sells to its customers for $29 per unit. Its unit variable cost is $4.80, and its unit fixed cost is $3.75. Top management of Bicycle Bob would like the Gear Division to transfer 4,000 gears to another division within the company at a price of $27. The Gear Division has no excess capacity to provide the units. What is the minimum transfer price that the Gear Division should accept? (Round answer to 2 decimal places (e.g., 52.75).) Minimum transfer price per unit $
The Gear Division of Bicycle Bob produces a 12-speed gear that it sells to its customers for $29 per unit. Its unit variable cost is $4.80, and its unit fixed cost is $3.75. Top management of Bicycle Bob would like the Gear Division to transfer 4,000 gears to another division within the company at a price of $27. The Gear Division has no excess capacity to provide the units. What is the minimum transfer price that the Gear Division should accept? (Round answer to 2 decimal places (e.g., 52.75).) Minimum transfer price per unit $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The Gear Division of Bicycle Bob produces a 12-speed gear that it sells to its customers for $29 per unit. Its unit variable cost is
$4.80, and its unit fixed cost is $3.75. Top management of Bicycle Bob would like the Gear Division to transfer 4,000 gears to
another division within the company at a price of $27. The Gear Division has no excess capacity to provide the units. What is the
minimum transfer price that the Gear Division should accept? (Round answer to 2 decimal places (e.g., 52.75).)
Minimum transfer price per unit
$
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