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CLICK HERE TO SAVE YOUR WORK B71 C D 59 02. Titanium Castings Ltd. has a Castings Division that does casting work of various types.

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CLICK HERE TO SAVE YOUR WORK B71 C D 59 02. Titanium Castings Ltd. has a Castings Division that does casting work of various types. The company's 60 Machine Products Division has asked the Castings Division to provide it with 22,000 special castings each year 61 on a continuing basis. The special castings would require $10 per unit in variable production costs. The Machine 62 Products Division has a bid from an outside supplier of $30 per unit for the castings 63 54 In order to have time and space to produce the special castings, the Castings Division would have to cut back es production of another casting: the RX100, which it presently is producing The RX100 sells for $34 per unit, 6 and requires $14 per unit in variable production costs. Boxing and stepping costs of the RX100 are $3 Boxing and shipping costs for the new special castings would be $1 per unit. The company is now producing and selling 100,000 units of the RX100 castings each year. Production and sales of this casting would drop by 22% if the new casting is produced. per unit Required: Show anylall we for price of the Castings Division if the transfer of 22.000 special castings 72 Show any all w 13 a) Calculate the transfer price of the Castings Division if the transfer of 22,000 special castings 74 was to take place between the two divisions. (5 marks) 75 76 Transfer price of Castings Division 77 b)What is the transfer price of the Machine Products Divison? (1 mark) 78 79 80 Transfer price of Machine Products Division 81 82 c) What is the transfer price range between the two divisiq 83 84 85 86 d) Do you think this transfer shoul take place? (1 mark) 87 88 89 ). Briefly explain why you said yes or no in (d) above. (2 marks) 90

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