Joliet Division Has the Capacity to Make 1,500 Units of an Intermediate

Multiple Choice

Joliet Division has the capacity to make 1,500 units of an intermediate good that is sold both internally and on the open market for a price of $32 each. To make the product, Joliet incurs $7 of variable cost per unit and $12 of fixed costs per unit.
What is the minimum price Joliet would accept for an internal transfer of 1,000 units of the product if the division is operating at 100% capacity?

A) $ 7.00 each
B) $19.00 each
C) $32.00 each
D) $30.00 each