(Appendix 11A) Division P of the Nyers Company Makes a Part

Multiple Choice

(Appendix 11A) Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows:
Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. Consider each part below independently.
-If outside customers demand 80,000 units and if,by selling to Division Q,Division P could avoid $4 per unit in variable selling expense,then according to the formula in the text,what is the lowest acceptable transfer price from the viewpoint of the selling division?

A) $35 per unit
B) $21 per unit
C) $31 per unit
D) $33 per unit