Estes Company Has Two Operating Divisions,A and B $\begin{array}{lrr} \text {Unit selling price } &\$350\\ \text { Unit variable costs} &\$200\\ \text { Unit fixed costs} &\$70\\\end{array}$

Multiple Choice

Estes Company has two operating divisions,A and B.The following information is provided for Division A: $\begin{array}{lrr} \text {Unit selling price } &\$350\\ \text { Unit variable costs} &\$200\\ \text { Unit fixed costs} &\$70\\\end{array}$
Division B uses the type of product produced by Division A and has approached Division A about buying the product internally.Division B is currently paying $300 to purchase the product from an outside source.If Division A sells internally,it can save $10 per unit in variable costs.Assuming that Division A has sufficient excess capacity to produce all of the units requested by Division B,which of the following is the lowest price Division A should consider for the transfer?

A) $300
B) $190
C) $260
D) $250