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A manufacturing company has two divisions: North and South. Division North produces a material that Division South needs. Below is the information about the material
A manufacturing company has two divisions: North and South. Division North produces a material that Division South needs. Below is the information about the material from Division North: $3.00 $4.00 | Variable cost per unit Full cost per unit Selling price per unit on the open market $9.00 Required: (Enter your answers to 2 decimal places.) 1. What is the maximum amount that Division South would pay for the material? 2. What is the minimum amount that Division North would charge for the component if there is excess capacity? What if there is no excess capacity? 3. What is a mutually beneficial transfer price (i.e., split the difference between the two divisions) if there is excess capacity? Complete this question by entering your answers in the tabs below. Required 1 1. 2a. Maximum Price Minimum price with excess capacity Minimum price without excess capacity Price that splits the difference 2b 3. & Regined
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