(Appendix 12A)Division T of Clocker Company Makes a Timer Which

Multiple Choice

(Appendix 12A) Division T of Clocker Company makes a timer which it sells for $30 to outside customers.The division has supplied the following data concerning the timer: Division S of Clocker Company is currently buying 5, 000 similar timers each month from an overseas supplier at $27 each.Division S would like to acquire its timers from Division T if the price is right. Suppose that Division T can sell only 10, 000 timers to outside customers.According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

A) $24 per timer
B) $27 per timer
C) $30 per timer
D) $15 per timer