Use the following information for the next 2 questions.
Division A of Sibley, Inc. has operating data as follows: 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?
A) $40
B) $75
C) $20
D) $60

Question

Use the following information for the next 2 questions.
Division A of Sibley, Inc. has operating data as follows:  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?
A) $40 
B) $75 
C) $20 
D) $60

Quizplus · Accepted Answer

Division A's minimum price should be $40, which is the variable cost of producing the units that Division B requires.

Use the Following Information for the Next 2 Questions