Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

& Moving to another question will save this response. Question 4 of 5 Question 4 10 points SA Muharraq Co, has Division A that manufactures

image text in transcribed
image text in transcribed
& Moving to another question will save this response. Question 4 of 5 Question 4 10 points SA Muharraq Co, has Division A that manufactures and sells a number of parts, including Part XYZ. Data concening Part XYZ appear below Capacity in units 55,000 $95 Selling price to outside customers Variable cost per unit $55 Fixed cost per unit (based on capacity) $20 The company has Division B that could use Part XYZ in one of its products Division B is currently purchasing 20,000 of Part XYZ per year from an overseas supplier at a cost of 993 per part The company has Division B that could use Part XYZ in one of its products. Division B is currently purchasing 20,000 of Pat XYZ per year from an overseas supplier at a cost of 193 per part Required: a. Assume that Division A is selling all of Part XYZ it can produce to outside customers. What is the acceptable range, if any, for the tranfer price between the two divi? 14 marks) b. Assume again that Division A is selling all of Part XYZ it can produce to outside customers. Also assume that $4 in variable expenses can be avoided on transfers within the company due to redond shipping and selling costs. What is the acceptable range, if any, for the transfer price between the two devions? [4 marks] e. Based on requirement (a), assume Division A offers to sell 20,000 units to Division 13 for $115 and that Division B refuses this price. What will be the loss in potential profits for D A7 12 marks] For the toolbar, press ALT+F10 (PC) or ALT+IN+F10 (Mac) *** A 24 I XOQ 52 V BI Paragraph US 10pt Arial m n CR LP

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Oracle E Business Suite Common Issues

Authors: Jeffrey T. Hare

1st Edition

1329529766, 978-1329529762

More Books

Students also viewed these Accounting questions

Question

According to AASB 136, a non-current asset should be:

Answered: 1 week ago