Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: 105 Selling price to outside
Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: 105 Selling price to outside customers Variable cost per unit Total fixed costs Capacity in units $ 828,000 34,500 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 $101 per unit and would substitute the part made by Division X. Division Y requires 6,900 units of the part each period. Division X can already sell all of the units it can produce on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X? $80 $96 O $24 $105
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started