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Rapid industries has muluple divisions, One division, Iron Products, makes a component that another division, Austin, is currently purchasing on the open market. Iron Products
Rapid industries has muluple divisions, One division, Iron Products, makes a component that another division, Austin, is currently purchasing on the open market. Iron Products currently has a capacity to produce 500,000 components at a variable cost of $700 and a full cost of $9.00. Iron Products has outside sales of 444,000 components at a price of $1250 per unit. Austin currently purchases 60,000 units from an outside supplier at a price of $1150 per unit. Assume that Austin desires to use a single supplier for its component 6. What will be the effect on Rapid Industries' operating profit if the transfer is made internally? Assume the 60,000 unis Austin needs are either purchased 100% internally or 100% externally b. What is the mirimum transter price? (Round your onower to 2 decimal pleces) c. What is the maximum transter price? (Round your answer to 2 decimat ploces)
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