Use the Following Information for Questions 103 and 104

question 104

Multiple Choice

Use the following information for questions 103 and 104.
The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can.
-Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?

• A) $0.24
• B) $0.32
• C) $0.22
• D) $0.30

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