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Southfield Division offers its product to outside markets for $135. It incurs variable costs of $60 per unit and fixed costs of $149,000 per month
Southfield Division offers its product to outside markets for $135. It incurs variable costs of $60 per unit and fixed costs of $149,000 per month based on monthly production of 24,000 units. Northfield Division can acquire the product from an alternate suppiler for $140 per unit or from Southwest Division for a transfer price of $135 plus $7 per unit in transportation costs Required: a. What are the costs and benefits of the aiternatives available to Southfield Division and Northfield Division with respect to the transfer of Southfield Division's product? Assurve that Southfleld Division can market all that it can produce: b. How would your answer change if Southfield Division had idle capacity sufficient to cover all of Northfield Division's needs
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