Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Division A produces a product that it sells to the outside market. It has compiled the following: $10 $3 $168000 Variable manufacturing cost per unit

image text in transcribedimage text in transcribed

Division A produces a product that it sells to the outside market. It has compiled the following: $10 $3 $168000 Variable manufacturing cost per unit Variable selling costs per unit Total fixed manufacturing costs Total fixed selling costs Per unit selling price to outside buyers Capacity in units per year $30000 $46 30000 Division B of the same company is currently buying an identical product from an outside provider for $43 per unit. It wishes to purchase 6000 units per year from Division A. Division A is currently selling 25000 units of the product per year. If the internal transfer is made, Division A will not incur any selling costs. What would be the minimum transfer price per unit that Division A would be willing to accept? $14.50 $15.50 $46.00 $10.00 Division A produces a product that it sells to the outside market. It has compiled the following: Variable manufacturing cost per unit $8 Variable selling costs per unit $3 Total fixed manufacturing costs $145000 Total fixed selling costs $30000 Per unit selling price to outside buyers $46 Capacity in units per year 30000 Division B of the same company is currently buying an identical product from an outside provider for $44 per unit. It wishes to purchase 5300 units per year from Division A. Division A is currently selling 30000 units of the product per year. If the internal transfer is made, Division A will not incur any selling costs. What would be the minimum transfer price per unit that Division A would be willing to accept? $46 $8 O $9 O $44

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Responsibility

Authors: Tom Cannon

2nd Edition

0273738739, 9780273738732

More Books

Students also viewed these Accounting questions

Question

Formulate strategies and recommendations for action on HRM issues.

Answered: 1 week ago