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Division Quezon City of JYD Company is currently operating at full capacity of 5,000 units. It sells all its production in a perfectly competitive market
Division Quezon City of JYD Company is currently operating at full capacity of 5,000 units. It sells all its production in a perfectly competitive market for P250 per unit. Its variable cost is P170 per unit, while its total fixed costs amounts to P300,000. The minimum transfer price that should be charged to Division Manila for each unit product transferred by Division Manila? O a. P230 O d. 2470 O c. P250 b. P170 Next Division One of Peter Senen Company is currently operating at 70% of capacity. It produces a single product and sells all its production to outside customers for P70 per unit. Variable costs is P30 per unit and fixed costs is P20 per units at the current production level. Division 2, which currently buys the same product from an outside supplier for P65 per unit, would like to buy the product from Division One. Division One will use one-half of its idle capacity if it decides to provide the requirements of Division 2. What is the minimum price that Division One should charge Division 2 for this product? b. P30 d. P65 a. P70 c. P50
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