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Must show work Sunflower Electronics is a company that produces and sells transistors. The company is organized into two divisions, Production Division which is the
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Sunflower Electronics is a company that produces and sells transistors. The company is organized into two divisions, Production Division which is the manufacturing division, and Distribution Division, which is - you guessed it - the retail distributor of transistors produced by Production Division. Production Division has the capacity to produce up to 5,000 transistors per year. If Production Division produces 3000 or fewer transistors per year, its variable cost per transistor is S5/unit; if it produces more than 3000 transistors per year, the production costs per transistor of those transistors produced in excess of 3000 units is $8/unit. Production Division has fixed costs totaling $50,000. Specify the transfer price for the internal transfer of transistors according to the general rule of transfer pricing. (20 points)Step by Step Solution
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