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Avery Company has two divisions. Polk and Bishop. Polk produces an hom that Bishop could use in production. Bishop currently purchasing 25.000 units from an
Avery Company has two divisions. Polk and Bishop. Polk produces an hom that Bishop could use in production. Bishop currently purchasing 25.000 units from an outside supplier for 324 perunt. Por is currently operating at less than its capacity of 600.000 units and has variable costs of $12 per unit. The full costo manufacture the unit is $18. Polk currently sells 450.000 units at a selling price of $25.50 per a. What will be the effect on Avery Company's operating profit of the transfer is made internally? b. What is the minimum transfer price from Polk's perspective? Minimum Transfer Price c. What is the maximum transfer price from Bishop's perspective? Maximum Transfer Price
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