Division a of DymocksLtd Has Operating Data as Follows Division B Wants to Purchase Units from Division
a

question 4

Multiple Choice

Division A of DymocksLtd has operating data as follows: $\begin{array}{llcc} \text { Capacity} & \text { 20,000 units } \\ \text { Selling price }& \text {\$ 80 per unit }\\ \text { Variable costs} & \text { \$ 45 per unit }\\ \text {Fixed costs } & \text { \$ 20 per unit }\\\end{array}$

Division B wants to purchase units from Division
A If Division A agrees to sell units to Division B, A's variable costs will be $5 less per unit. If Division A is operating at capacity, what is the minimum price it should charge?

• A) $75
• B) $20
• C) $40
• D) $60

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