You Have Been Provided with the Following Information for the Wool

Multiple Choice

You have been provided with the following information for the Wool Division of a decentralized company:
$$\begin{array} { l l} \text { Selling price } & \$ 45 \\\text { Variable cost per unit } & \$ 33 \\\text { Fixed cost per unit } & \$ 12 \\\text { Sales volume (units) } & 22,500 \\\text { Capacity (units) } & 25,000\end{array}$$
The Blanket Division would like to purchase all of its units internally. The Blanket Division needs 6,000 units each period and currently pays $42 per unit to an outside firm. Assuming that the Blanket Division wants to use a sole supplier and will not purchase less than 6,000 from a supplier, what is the lowest price that Wool Division should accept from the Blanket Division?

A) $45.
B) $42.
C) $40.
D) $38.