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Division A and Division B are divisions within the same company. The managers of both division are evaluated based on their desin's Avame the
Division A and Division B are divisions within the same company. The managers of both division are evaluated based on their desin's Avame the following information relative to two divisions: Division A Capacity in units Numbers of units now being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed cost per unit (based on capacity) Division B Number of units needed annually Purchase price now being paid to an outside supplier 150,000 150,000 $75 $45 $20 20,000 $73 A study indicates that Division A can avoid $5 per unit in shipping costs on any sales to Division B. Required: Compute the following 1. Calculate the lowest acceptable transfer price for the seller (Division A)? 2. Calculate the highest accentabia ima
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