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National Company has two divisions, Walton and lowa. Walton produces an item that lowa could use in its production. Iowa currently is purchasing 48,000 units
National Company has two divisions, Walton and lowa. Walton produces an item that lowa could use in its production. Iowa currently is purchasing 48,000 units from an outside supplier for $31 per unit. Walton has sufficient capacity and has variable costs of $15 per unit. The full cost to manufacture the unit is $29. Walton currently sells 430,000 units at a selling price of $32 per unit. Required: a. What will be the effect on National Company's operating profit if the transfer is made internally? b. What will be the change in profits for Walton if the transfer price is $23.00 per unit? c. What will be the change in profits for lowa if the transfer price is $23.00 per unit? Complete this question by entering your answers in the tabs below. What will be the effect on National Company's operating profit if the transfer is made internally? National Company has two divisions, Walton and lowa. Walton produces an item that lowa could use in its production. Iowa currently is purchasing 48,000 units from an outside supplier for $31 per unit. Walton has sufficient capacity and has variable costs of $15 per unit. The full cost to manufacture the unit is $29. Walton currently sells 430,000 units at a selling price of $32 per unit. Required: a. What will be the effect on National Company's operating profit if the transfer is made internally? b. What will be the change in profits for Walton if the transfer price is $23.00 per unit? c. What will be the change in profits for lowa if the transfer price is $23.00 per unit? Complete this question by entering your answers in the tabs below. What will be the change in profits for Walton if the transfer price is $23.00 per unit? National Company has two divisions, Walton and lowa. Walton produces an item that lowa could use in its production. lowa currently is purchasing 48,000 units from an outside supplier for $31 per unit. Walton has sufficient capacity and has variable costs of $15 per unit. The full cost to manufacture the unit is $29. Walton currently sells 430,000 units at a selling price of $32 per unit. Required: a. What will be the effect on National Company's operating profit if the transfer is made internally? b. What will be the change in profits for Walton if the transfer price is $23.00 per unit? c. What will be the change in profits for lowa if the transfer price is $23.00 per unit? Complete this question by entering your answers in the tabs below. What will be the change in profits for Iowa if the transfer price is $23.00 per unit
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