Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

8. Division produces a small motor that can be used in Division B's final product. B has been purchasing the motor from Co. O for

image text in transcribed
8. Division produces a small motor that can be used in Division B's final product. B has been purchasing the motor from Co. O for $84/unit. Division S's manager has approached the manager of Division B about selling these motors to Division B. Division Sincurs these unit costs: Direct materials $16, Direct labor $8, Variable overhead $6, Fixed overhead $24 Currently, Division Scan produce 150,000 motors but is only producing 120,000. Div. B needs 20,000 units per year. The maximum/minimum transfer price should be respectively a $84/30 C. $84/54 b. $54/24 d $30/24 I 9. Refer to question 8. Suppose Divisions S and B agree on a transfer price of $60. What is the benefit to each division respectively? a $600,000/$480,000 c. $480,000/S600,000 b. $1,080,000/$0 d. $0/$1,080,000 10.-Refer to question 8. If S is at full capacity, the transfer price should be: a. Between $30 and $84 c. $30 b. $84 d. $54

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

Audit Customer Satisfaction Marketing Added Value

Authors: Cindy E. Cosmas

1st Edition

089413373X, 978-0894133732

More Books

Students also viewed these Accounting questions

Question

What is the preferred personality?

Answered: 1 week ago

Question

What is the relationship between humans?

Answered: 1 week ago