Lancaster Company has two divisions, A and B. Division A manufactures a component that Division B uses.

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Lancaster Company has two divisions, A and B. Division A manufactures a component that Division B uses. The variable cost to produce this component is \($1.50\) per unit; full cost is \($2.00\). The component sells on the open market for \($5.00\). Assuming Division A has excess capacity, what is the lowest price Division A will accept for the component? What is the highest price that Division B will pay for it?

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Managerial Accounting

ISBN: 9780078110771

1st Edition

Authors: Stacey WhitecottonRobert LibbyRobert Libby, Patricia LibbyRobert Libby, Fred Phillips

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