Question
Per kilogram (kg) data on the selling price, variable costs, machine hours necessary for production are given below: N44 O77 Selling price 30.00 14.00 Variable
Per kilogram (kg) data on the selling price, variable costs, machine hours necessary for production are given below:
N44 | O77 | |
Selling price | 30.00 | 14.00 |
Variable Manufacturing Cost | 6.00 | 5.00 |
Variable Selling Cost | 3.50 | 2.00 |
Machine Hours | 2.0 | 0.5 |
External Monthly Market Demand (in kgs) | 5,000 | 10,000 |
Beetle Away has 16,500 machine hours of capacity available every month.
another division of Scotts lawn care, Lawn Life has an opportunity to process B99 further into a consumer product that would protect lawns from the Blue Hair beetle. Lawn Life would incur additional variable manufacturing costs of 7 per kilogram in reducing the potency of the pesticide and packaging it for home use. An outside distributor has offered Lawn Life 30/kg for up to 7,000 kgs of the modified N44 per month as long as it provided in 1,000 kg increments.
What is the optimal transfer price per kg for Beetle Away to charge Lawn Life for the new pesticide, N44, for 0 to 750 kgs? That is, figure out the optimal TP per kg for any level of internal transfers of N44 between 0 and 750 kgs. Enter your answer as just a number with no currency symbols or per kg notation.
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