Answered step by step
Verified Expert Solution
Link Copied!

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
image text in transcribed
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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Managerial Accounting For Manager

Authors: Eric Noreen, Peter C. Brewer, Ray H. Garrison

6th Edition

1265118434, 9781265118433

More Books

Students also viewed these Accounting questions

Question

What impediments deal with regulators?

Answered: 1 week ago

Question

What are their performance levels?

Answered: 1 week ago