Question
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
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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 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
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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 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
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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 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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