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0. Division P of Turbo Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside
0. Division P of Turbo Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $65. Division Q of Turbo Corporation currently buys 30,000 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $90 per wheel set. Division Q would like to buy the 30,000 wheel sets it needs annually from Division P. Compute the transfer price range 2. What is the impact on OI for Turbo Corporation as a whole? 3. What is the impact on OI for each division if transfer price is $87? 1. 0. Division P of Turbo Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $65. Division Q of Turbo Corporation currently buys 30,000 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $90 per wheel set. Division Q would like to buy the 30,000 wheel sets it needs annually from Division P. Compute the transfer price range 2. What is the impact on OI for Turbo Corporation as a whole? 3. What is the impact on OI for each division if transfer price is $87? 1
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