Barrister Company Has Two Divisions: a and Z

Multiple Choice

Barrister Company has two divisions: A and Z.The A Division produces a single product that can be sold to outside customers or to the Z Division.Sales forecasts,production statistics and costs for both divisions for 2008 are shown below:
A Division:
Z Division:
* When A Division sells to Z Division,no variable selling costs are incurred by A Division.Calculate the minimum per unit transfer price that A Division should charge Z Division in 2008,using the general transfer-pricing formula.

A) $6.00
B) $8.50
C) $7.26
D) None of the given answers