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Crane Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment.
Crane Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment. Vancouver has the capacity to manufacture 120,000 units of component TR222. Vancouver's variable costs are $152 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $92 of variable costs to the component and sells the final product for $460. Consider the following independent situations: Vancouver can sell all 120,000 units of TR222 on the open market at a price of $240 per unit. Kamloops is willing to buy 12,000 of those units. What should the transfer price be? Transfer price $ eTextbook and Media per unit Of the 120,000 units of component TR222 it can produce, Vancouver can sell 84,000 units on the open market at a price of $240 per unit. Kamloops is willing to buy an additional 12,000 units. What should the minimum transfer price be? Minimum transfer price $ per unit SUPPORT
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