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Ivanhoe Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment. Vancouver
Ivanhoe Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment. Vancouver has the capacity to manufacture 250,000 units of component TR222. Vancouver's variable costs are $150 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $90 of variable costs to the component and sells the final product for $465. Consider the following independent situations: Of the 250.000 units of component TR222 it can produce, Vancouver can sell 200,000 units on the open market at a price of $250 per unit. Kamloops is willing to buy an additional 75,000 units. What should the transfer price be? (Round answer to 2 decimal places, e.g. 52.75.) Transfer price per unit
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