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(Please write out correct answer and whether its A, B, C or D.) Thank you! Division A manufactures electronic circuit boards. They can either be
(Please write out correct answer and whether its A, B, C or D.) Thank you!
Division A manufactures electronic circuit boards. They can either be sold to Division B of the same company or to an outside supplier. Division A and Division B have these income and cost structures: Division A Division B Sales price $1,000 per unit $2,000 per unit Expenses: Variable $600 per unit $1,200* per unit * $1,000 for materials and $200 for other conversion costs within Division B Fixed costs $50,000 in total $100,000 in total Assume that Division A has excess capacity. Division A can produce 10,000 units of the materials currently purchased by Division B from an outside supplier. What is the maximum transfer price Division A can charge Division B? O $650 per unit $600 per unit O $1,000 per unit $1,800 per unit Step by Step Solution
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