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please assist in answering this... QUESTION FOUR [20] T and UU are two divisions at the VV Group. The TT division manufactures batteries which it
please assist in answering this...
QUESTION FOUR [20] T and UU are two divisions at the VV Group. The TT division manufactures batteries which it sells to other divisions and external customers. The UU division has designed a new product with the name of product B and has asked T division to supply them with the battery component. Each unit of product B will require one battery component. This battery component will not be sold by TT to external customers. TT division has quoted a transfer price of R585 for each battery. It is the policy of VV Group to reward managers based on their divisional returns on capital employed. Details of the monthly production for each division are as follows: The relationship between monthly customer demand and the selling price of product B is shown below: Required: 4.1. Calculate, based on the transfer price of R585 per battery component, the monthly profit that would be earned because of selling product B by: a) UU division b) T1 division c) VV GroupStep by Step Solution
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