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Question 2 Division A of Nextron Bhd. makes a component that can either be sold to external customers or transferred internally to Division R, which
Question 2 Division A of Nextron Bhd. makes a component that can either be sold to external customers or transferred internally to Division R, which uses the components in its final product. The annual data relating to this component are as follows: Annual production capacity Selling price of the item to external customers Variable cost per unit Fixed cost per unit 25,000 unit RM27 RM15 RM3 Division R requires 15,000 units per year and is currently paying an outside supplier RM25 per unit. Consider each part below independently. 2 MBAC 2073 MARCH 2022 You are required to justify: a. the lowest acceptable transfer price that Division A can offer if Division A has an external demand of 10,000 units. (3 marks) b. the lowest transfer price acceptable from the view point of Division Air Division A has an external demand of 25,000 units. (2 marks) the lowest acceptable transfer price from the view point of Division Aif Division A has an external demand of 15,000 units. (5 marks) c
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