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Max Ltd. Produces kitchen tools, and operates several divisions as profift centers. Division A produces a product that it sells to other companies for $16
Max Ltd. Produces kitchen tools, and operates several divisions as profift centers. Division A produces a product that it sells to other companies for $16 per unit. It is currently operating at its full capacity of 45,000 units per year. Variable manufacturing cost is $9 per unit, and variable marketing cost is $3 per unit. The company wishes to create a new division, Division B, to produce an innovative new tool h requires the use of Division A's product (or one very similar). Division B units. Currently, Division B can purchase a product equivalent to Divi for $15 per unit. However, Max Ltd. is considering transferring the necessary product from will produce 30,000 sion A's from Company K. Division A. Required: sume the transfer price is $12 per unit. How would this affect the purchasing costs of Division B? 1) As
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