Clarke Company Records Reveal the Following $\quad$ $\quad$ $\quad$

Multiple Choice

Clarke Company records reveal the following: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Division } X$
$\begin{array}{ll}\begin{array}{l}\text { Market price of finished comp onent to } \\\text { outsiders }\end{array} & \$ 32 \\\text { V ariable costs per component }& \underline{24} \\\text { Contribution margin per comp onent } & \underline{\$ 8}\\\text { Total contribution for } 20,000 \text { comp onents } & \underline{\$ 160,000}\end{array}$
The variable costs of Division Y will be incurred whether it buys from Division X or from an outside supplier. If Division X is working at full capacity, the lowest transfer price it would be willing to accept from Division Y would be:

A) $32
B) $22
C) $24
D) $8