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Use the data from BE8-7 but assume that the units being requested are special high-performance units and that the divisions variable cost would be $27 per unit (rather than $25). What is the minimum transfer price that the Heating Division should accept?
BE8-7 The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $25, and its fixed cost per unit is $10. Top management of Kobe International would like the Heating Division to transfer 15,000 healing units to another division within the company at a price of $29. The Heating Division is operating at full capacity. What is the minimum transfer price that the Heating Division should accept?
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