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Dual Transfer Pricing The Athens Company has two divisions, Alpha and Delta. Delta Division produces a product at a variable cost of $12 per unit,
Dual Transfer Pricing The Athens Company has two divisions, Alpha and Delta. Delta Division produces a product at a variable cost of $12 per unit, and sells 200,000 units to outside customers at $20 per unit and 60,000 units to Alpha Division at variable cost plus 50%. Under the dual transfer price system, Alpha Division pays only the variable cost per unit. Delta Division's fixed costs are $575,000 per year. After further processing, Alpha sells the 60,000 units to outside customers at $40 per unit. Alpha has variable costs of $11 per unit, in addition to the costs from Delta Division. Alpha Division's annual fixed costs are $380,000. There are no beginning or ending inventories. Prepare the income statements for the two divisions and the company as a whole. Do not enter any answer as negative numbers. Athens Company Divisional Income Statement Alpha Delta Company Sales: External $ $ $ Internal Total Variable costs: Incurred Transferred in Total Contribution margin Fixed costs Net income $ $ $
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