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MSUM Corp. has two divisions, East and West. East produces a gadget that West could use in its production. West currently purchases 100,000 gadgets for $25 on the open market. East s variable costs are $12 per widget while the full cost is $18.70. East sells gadgets $26 each. If East is operating at capacity, what would be the maximum transfer price West would pay internally?

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MSUM Corp. has two divisions, East and West. East produces a gadget that West could use in its production. West currently purchases 100,000 gadgets for $25 on the open market. East s variable costs are $12 per widget while the full cost is $18.70. East sells gadgets $26 each. If East is operating at capacity, what would be the maximum transfer price West would pay internally?

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