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Question: you have been provided with the following information for division...

Question details

You have been provided with the following information for Division X of a decentralized company:

Selling price $ 85
Variable cost per unit 61
Fixed cost per unit 26
Sales volume (units) 21,600
Capacity (units) 25,300


Division Y of the same company would like to purchase all of its units internally. Division Y needs 11,100 units each period and currently pays $79 per unit to an outside firm. What is the lowest price that Division X could accept from Division Y? (Assume that Division Y wants to use a sole supplier and will not purchase less than 11,100 from a supplier.)

Please show all of your work.

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