(Appendix 12A)Division 1 of Ace Company Makes and Sells Wheels

Multiple Choice

(Appendix 12A) Division 1 of Ace Company makes and sells wheels that can either be sold to outside customers or transferred to Division 2.The following data are available from last month: Division 1: Division 2: If Division 1 sells the wheels to Division 2, Division 1 can avoid $2 per unit in sales commissions.
What is the maximum price per wheel that Division 2 should be willing to pay Division 1 if a transfer were to take place?

A) $33 per unit
B) $35 per unit
C) $47 per unit
D) $50 per unit