Question
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $12. Division B
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $12. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost plus assuming 24% transfer price?
- Variable cost per unit $6.14
- Fixed cost per unit 1.15
- Division B sales price of Component X 14.5
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $14. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the full-cost plus assuming 24% transfer price?
- Variable cost per unit $7.13
- Fixed cost per unit 1.89
- Division B sales price of Component X 14.5
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Connect For Financial Accounting Fundamentals
Authors: Author
8th Edition
126411169X, 9781264111695
