Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Division Y has asked Division X of the same company to supply it with 8,600 units of part L763 this year to use in one

image text in transcribed
Division Y has asked Division X of the same company to supply it with 8,600 units of part L763 this year to use in one of its products Division Y has received a bid from an outside supplier for the parts at a price of $51 per unit Division X has the capacity to produce 34,400 units of partL763 per year. Division X expects to sell 30,960 units of part L763 to outside customers this year at a price of $55.60 per unit. To fill the order from Division Y Division X would have to cut back its sales to outside customers. Division X produces part 1763 at a variable cost of $43 per unit. The cost of packing and shipping the parts for outside customers is $2 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to Division Y. Required: a. What is the range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 8,600 parts this year from Division X to Division Y? (Round your final answers to 2 decimal places.) Range of transfor prices

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

3 Column Record 100 Page Account Book

Authors: IJ Publishing LLC

Ntb Edition

1537091360, 978-1537091365

More Books

Students also viewed these Accounting questions

Question

=+What kind of question would you ask to encourage their response?

Answered: 1 week ago

Question

=+Does it keep the visitor reading?

Answered: 1 week ago