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Please someone help me with this problem? thank you value: 12.50 points Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use
Please someone help me with this problem? thank you
value: 12.50 points Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow Selling price Expenses $24 Variable Fixed (based on a capacity of $14 102,000 tons per year) 6 20 Net operating income $4 Hrubec Products has just acquired a small company that manufactures paper cartons. This company will be treated as a division of Hrubec with full profit responsibility. The newly formed Carton Division is currently purchasing 33,000 tons of pulp per year from a supplier at a cost of $24 per ton, less a 10% purchase discount. Hrubec's president is anxious for the Carton Division to begin purchasing its puip from the Pulp Division if an acceptable transfer price can be worked out Required: For (1) and (2) below, assume that the Pulp Division can sell all of its pulp to outside customers for $24 per ton. 1-a. What is the minimum transfer price for Carton Division? Transfer price 2 1-b. What is the maximum transfer price that Pulp Division is ready to pay? (Round your answer to 2 decimal places.) Maximum transfer priceStep by Step Solution
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