Answered step by step
Verified Expert Solution
Question
1 Approved Answer
plesse solve Question 4 (part 2 of 2) GinFim Itd produces kitehen tools, and operates several divisions as profit centers. Division M produce. product that
plesse solve
Question 4 (part 2 of 2) GinFim Itd produces kitehen tools, and operates several divisions as profit centers. Division M produce. product that it sells to other companies for $16 per unit. It has a maximum capacity of 45,000 units per year. Vhriable manufacturing cost is $9 per unit, and variable marketing cost is $3 per unit. Total fixed manufacturing overhead is $200,000, and fixed marketing costs are $60,000. Division N of GinFizz Ltd. is planning to produce an innovative new toof that requires the use of Division M's product (or one very similar). Division N will require 30,000 units of Division Me product. Currently, Division N can purchase a product equivalent to Division M s from Company X for $15 per unit. However, GinFizz Ltd, is considering transferring the necessary product from Division M to Division N. Required: b. Assume Division M is operating at 80% of full capacity and Division N accepts no oartial order. What would be the minimum and maximum transfer price? Should the ransfer take place? (6 marks) Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started