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Division A produces a product that it sells to the outside market. It has compiled...

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Accounting

Division A produces a product that it sells to the outside market. It has compiled the following:

Variable manufacturing cost per unit $9
Variable selling costs per unit $3
Total fixed manufacturing costs $146000
Total fixed selling costs $30000
Per unit selling price to outside buyers $59
Capacity in units per year 30000

Division B of the same company is currently buying an identical product from an outside provider for $57 per unit. It wishes to purchase 4600 units per year from Division A. Division A is currently selling 25400 units of the product per year. If the internal transfer is made, Division A will not incur any selling costs. What would be the minimum transfer price per unit that Division A would be willing to accept?

$10

$57

$9

$59

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