Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume a company has two divisions, Division B and Division C. Division B has provided the following information regarding the one product that it manufactures

image text in transcribed
image text in transcribed
Assume a company has two divisions, Division B and Division C. Division B has provided the following information regarding the one product that it manufactures and sells on the outside market Selling price per unit (on the outside market) Variable cost per unit Fixed costs per unit (based on capacity) Capacity in units $ 60 $ 44 $ 8 20,000 Division C could use Division B's product as a component part in the manufacture of 4,000 units of its own newly-designed product. Division Chas received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division B makes if the company's divisional managers are evaluated based on their division's profits and Division is currently selling 15,000 units on the outside market, what is Division B's lowest acceptable transfer price if it were to sell 4.000 units to Division C? Multiple Choice $44 $50 o $52 Multiple Choice O O $44 O $50 O $52 O $48

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

Students also viewed these Accounting questions