Division A of Barsema, Inc. has operating data as follows: Capacity 20,000 units Selling price $80 per unit Variable costs $45 per unit Fixed costs $20 per unit Division B wants to purchase units from Division A. If Division A agrees to sell units to Division B, A's variable costs will be $5 less per unit. If Division A has capacity available to meet B's requirements, what is the minimum price it should charge

the minimum price it should charge is $40 per unit.

Explanation:

Minimum Transfer Price = Variable Costs - Internal Savings + Opportunity Cost

Note :  Division A has capacity available to meet B's requirements therefore there is no opportunity cost.

There are Internal savings of $5 as A's variable costs will be $5 less per unit.

Minimum Transfer Price = $45 - $5

                                        = $40

a recipe serves 8 people, and calls for 5 lbs of apples and 2 cups of flour. you want to prepare it for 24 people. divide 24 by 8 to get 3, and then multiply your ingredients by 3.

so for 24 people, you'll need 15 lbs of apples, and 6 cups of flour.

answer; no individual buyer or seller has any significant impact on the market price;