Answer:
Minimum transfer price =$ 0.57
Explanation:
The Can Division of Sheffield Corp is already operating her full capacity,
This implies that it call sell all it can produce to external buyers, to remain indifferent it will have have to make the same amount of contribution from internal sales it would from external.
Therefore the minimum transfer price:
Minimum transfer price= Variable cost - internal savings in variable cost + contribution from external sales
Savings in variable cost = $0.03
Contribution from external sales = $0.60 - $0.24 = $0.36
The minimum transfer price would be equal
Minimum transfer price = 0.24 - 0.03 + 0.36 = 0.57