(Appendix 11A) Royal Products, Inc

Multiple Choice

(Appendix 11A) Royal Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below:
The Transmission Division is currently purchasing 6,000 of these connectors per year from an overseas supplier at a cost of $65 per connector.
-What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?

A) $35 per unit
B) $65 per unit
C) $56 per unit
D) $21 per unit