=+5. The Baron Company consists of 2 divisions that trade extensively with each other. The relevant revenue
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=+5. The Baron Company consists of 2 divisions that trade extensively with each other. The relevant revenue and cost functions for the final product are given below:
R = 205 - 0.5Q (1)
Cm = 19 + Q (2)
Cd = 10 + 0.7Q (3)
where R is the unit revenue of the final product, C m is the unit cost incurred by the supplier division in making the product and Cd is the unit cost function associated with the distribution and sale of the final product by the user division. Q is the quantity of product transferred.
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Related Book For 
Accounting For Management Control
ISBN: 9780412374807
2nd Edition
Authors: David Otley And Kenneth Merchant Clive Emmanuel
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