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: Variable manufacturing cost per unit $10 Variable selling

image text in transcribed

Division A produces a product that it sells to the outside market. It has compiled the following: Variable manufacturing cost per unit $10 Variable selling costs per unit $3 Total fixed manufacturing costs $170000 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 4200 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 $11 $10 $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

Step: 3

blur-text-image

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

Bank Strategy, Governance And Ratings

Authors: P. Molyneux

3rd Edition

0230313345, 9780230313347

More Books

Students also viewed these Accounting questions

Question

Evaluate each of the following. $ 100 [(1 + 0.04) 2 1 0.04]

Answered: 1 week ago

Question

Is there something else I need more?

Answered: 1 week ago