S 63 54 Costs after allocation 35 56 57 Question 2 - 10 marks 59 Q2. Titanium Castings Ltd has Castings Division that doen casting work of various types. The company's Machine Products Division has asked the Castings Division to provide it with 22,000 special castings each your 61 on a continuing basis. The special castings would require 510 per unit in variable production cents. The Machine Products Division has a bid from an outlide supplier of S30 per unit for the castings 64 In order to have time and space to produce the special casting, the Castings Division would have to cut back 65 production of another casting the RX100, which it presently is producing. The RX100 sells for $34 per unit, 66 and requires S14 per unit in variable production costs Boxing and shipping costs of the RX100 are 33 per unit 67 Boxing and shipping costs for the new special castings would be S1 per unit. The company is now producing and selling 100,000 units of the RX100 castings each year, Production and sales of this casting 69 would drop by 229 if the new casting is produced. 70 71 Required: 32 Show anyfall workings in here: 23 a) Calculate the transfer price of the Castings Division if the transfer of 22,000 special castings -4 was to take place between the two divisions. (5 marks) Transfer price of Castings Division b) What is the transfer price of the Machine Products Divison? (1 mark) SECTION 6 FORMULASHI SECTION 5 SECTION 4 SECTION 3 SECTION 2 Instructions HOME DATA VIIW Ver | 1 - PW CLICK HERE TO SAVE YOUR WORK 33 11 Show anyfall working in here 74 22 ) Calculate the transfer price of the Castings Division if the transfer of 22,000 special casting was to take place between the two divisions. (5 marks) 75 16 Transfer price of Castings Division 77 78 b) What is the transfer price of the Machine Products Divison? (1 mark) NO Transfer price or Machine Products Division 81 c) What is the transfer price range between the two divisid 3 84 85 86 d) Do you think this transfer shoul take place? (1 mark) 88 89 ). Briefly explain why you said yes or no in (d) above. (2 marks) 30 SECTION 6 FORMULA SHE SECTION 3 SECTION 5 SECTION 2 SECTION 4 Instructions