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Materials used by the Instrument Dwision of Ziegler Inc. are currently purchased from outsibe suppilers at a tost of s2too per unit. Howeves, the same
Materials used by the Instrument Dwision of Ziegler Inc. are currently purchased from outsibe suppilers at a tost of s2too per unit. Howeves, the same materiak are available from the Components Division. The Components Division has unused capacity and cas aroduce the materials needed by the Instrument Division at a variable cost of 5216 per unit. Assume that a trensfer price of $247 has been estabished and that 33,500 units of materals are travsferred, with no reduction in the Compenents Divisisn' cureme Lales. a. How much would Ziegler inc's total egerating incone increase? b. How much would the Instrument Disise's bperating incorse increase? I c. How much would the Components Divisions operating income inorease? d. Amy transfer price will cause the tocal income of the company to. materisis for products that are sttimately sold to the cutside
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