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Elmira Manufacturing Inc. has two divisions, Division A and Division B. Division A produces car stereos that it sells to retail stores for a price
Elmira Manufacturing Inc. has two divisions, Division A and Division B. Division A produces car stereos that it sells to retail stores for a price of $100 per unit. Its full capacity is 246,000 units, but it currently sells 210,100 units. It incurs the following costs in its production: Direct materials Direct labour Variable overhead Fixed overhead $40 27 13 8 Division B is purchasing 18,000 units of the same stereo from an outside supplier for $88 per unit. Calculate the minimum transfer price Division A is willing to accept. Minimum transfer price $ Determine the effect on the net income of Division A at the price determined in part a. (If an answer is zero, please enter 0. Do not leave any field blank.) Net income increase $ Determine the effect on the net income of Division B at the price determined in part a. Net income increase $
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