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Division A of XYZ Co. produces units that can either be sold to outside customers or transferred to XYZs Division B. The following data are

  1. Division A of XYZ Co. produces units that can either be sold to outside customers or transferred to XYZs Division B. The following data are available from the last year:

    Division A

    Production capacity in units 20,000

    Selling price per unit to outside customers $25

    Variable cost per unit $15

    Total fixed production and selling costs $80,000

    Division B

    Number of units needed annually 4,000

    Price per unit paid to an outside supplier $18

    If the Division A can sell all 20,000 units annually to outside customers, what is the lowest acceptable transfer price from Division As standpoint on each of the 4,000 units?

    A.

    $15

    B.

    $18

    C.

    $19

    D.

    $25

10 points

QUESTION 27

  1. Division A of XYZ Co. produces units that can either be sold to outside customers or transferred to XYZs Division B. The following data are available from the last year:

    Division A

    Production capacity in units 20,000

    Selling price per unit to outside customers $25

    Variable cost per unit $15

    Total fixed production and selling costs $80,000

    Division B

    Number of units needed annually 4,000

    Price per unit paid to an outside supplier $18

    If the Division A can sell all 20,000 units annually to outside customers, what is the highest acceptable transfer price from Division Bs standpoint on each of the 4,000 units?

    A.

    $15

    B.

    $18

    C.

    $19

    D.

    $25

10 points

QUESTION 28

  1. Division A of XYZ Co. produces units that can either be sold to outside customers or transferred to XYZs Division B. The following data are available from the last year:

    Division A

    Production capacity in units 20,000

    Selling price per unit to outside customers $25

    Variable cost per unit $15

    Total fixed production and selling costs $80,000

    Division B

    Number of units needed annually 4,000

    Price per unit paid to an outside supplier $18

    If the Division A can sell 15,000 units annually to outside customers, what is the lowest acceptable transfer price from Division As standpoint on each of the 4,000 units?

    A.

    $15

    B.

    $18

    C.

    $19

    D.

    $25

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