Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

2. Among its divisions, Textron Inc., owns Kelly Aerospace, and Cessna Aircraft. The company is attempting to negotiate a transfer price for Kelly's aircraft magnetos

image text in transcribed
2. Among its divisions, Textron Inc., owns Kelly Aerospace, and Cessna Aircraft. The company is attempting to negotiate a transfer price for Kelly's aircraft magnetos to Cessna. Calculate the range of acceptable transfer prices for each of the following situations. Cessna received a quote from its regular supplier for $77 per magneto. The company needs 5,000 magnetos per year. The following data applies to Kelly Aero. Show your work. Selling price per magneto Variable cost per magneto $62 Fixed cost per unit (based on capacity) $8 Kelly Aero manufacturing capacity 25,000 magnetos $80 A. Kelly Aero can sell 20,000 magnetos to other customers B. Kelly Aero can sell 22,500 magnetos to other customers C. Kelly Aero can sell 25,000 speakers to other customers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions