Determine the best response in accordance with the situation given.

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Chapter 9, Problem 27CADQ

To determine

Determine the best response in accordance with the situation given.

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Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $27 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is operating at full capacity and can sell all of the chemical that it can produce, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $6.00 per ounce $21.00 per ounce $15.00 per ounce $27.00 per ounce