Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

23 01:47:30 Yolpin Company has a Components Division which produces parts for product divisions within the company as well as for outside manufacturers. The company's

image text in transcribed
23 01:47:30 Yolpin Company has a Components Division which produces parts for product divisions within the company as well as for outside manufacturers. The company's Business Products Division has asked the Components Division to provide it with a new part, A97. Production data related to A97 are as follows: Units needed by Business Products Division 20,000 units Variable production cost $37 per unit Allocated fixed production cost $3.50 per unit Unfortunately, producing the new part requires the same production team within the Components Division that manufactures another part, B19, for outside customers. Data related to the production and sale of B19 to outside customers are below: Units currently produced & sold 100,000 units Selling price $70,00 per unit Variable production cost $52.00 per unit Variable selling cost $8.00 per unit Allocated fixed production cost $2.00 per unit Q:) If the Components Division must reduce the production of B19 by 36% in order to produce all of the part A97 requested by the Business Products Division, what would be the minimum transfer price they should be willing to accept assuming there would be no impact to their fixed cost? A:) $ per unit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

The Lean Audit A Detailed User Guide For The Lean Factory Audit Online

Authors: Isaias Wallaker

1st Edition

B09R3HXJ11, 979-8408651320

More Books

Students also viewed these Accounting questions