Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sarasota Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures vehicles. Sarasota sells car stereos to Berna, as well as
Sarasota Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures vehicles. Sarasota sells car stereos to Berna, as well as to other vehicle manufacturers and retail stores. The following information is available for Sarasota's standard unit: unit variable cost $39, unit fixed cost $22, and unit selling price to outside customer $88. Berna currently purchases a standard unit from an outside supplier for $83. Because of quality concerns and to ensure a reliable supply, the top management of Berna has ordered Sarasota to provide 216,000 units per year at a transfer price of $33 per unit. Sarasota is already operating at full capacity. Sarasota can avoid $3 per unit of variable selling costs by selling the unit internally. Answer each of the following questions. Your Answer Correct Answer * Your answer is incorrect. What is the minimum transfer price that Sarasota should accept? Minimum transfer price $ 91
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