Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Q 8.36: The media division of Dakota Biological Supply company produces media for growing fungi, which can either be sold to the fungal division for
Q 8.36: The media division of Dakota Biological Supply company produces media for growing fungi, which can either be sold to the fungal division for growing cultures or sold to outside entities. The cost sheet for pre-poured plates of potato dextrose agar which are sold in 10 plate units is as follows: Direct material $ 3.75 Direct labor $ 6.50 Variable overhead $ 1.25 Fixed overhead $ 3.50 Selling price per 10 plates $25.00 The fungal division needs 10,000 plates of potato dextrose agar annually. Currently, the fungal division purchases them from Arizona Lab Supplies for $25.00 for a unit of 10 plates because the media division has no excess capacity. However, recently the media division has lost a major customer and now has the capacity to provide the plates. What would be the minimum transfer price per sleeve of 10 plates? A $25.00 per unit B $10.00 per unit $18.00 per unit D $11.50 per unit
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