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Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling price to outside customers
Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling price to outside customers $ Variable cost per unit $ Total fixed costs $ Capacity in units Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $ per unit and would substitute the part made by Division X Division Y requires units of the part each period. Division X has sufficient excess capacity to handle all of Division Ys needs without any increase in fixed costs and without cutting into outside sales. What is the lowest transfer price Division X will accept? $ $ $ $ $
Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below:
Selling price to outside customers
$
Variable cost per unit
$
Total fixed costs
$
Capacity in units
Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $ per unit and would substitute the part made by Division X Division Y requires units of the part each period. Division X has sufficient excess capacity to handle all of Division Ys needs without any increase in fixed costs and without cutting into outside sales. What is the lowest transfer price Division X will accept?
$
$
$
$
$
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