Texas Products, Inc.

IMA Case Study

Calculate the contribution margin ratios for both the Amarillo and Midland Divisions using the two transfer prices mentioned in the case: $38.00 used in the original bid, and $58.20 needed by Ella to earn her bonus. What conclusions do you draw from these calculations?

This is the link to the problem in its entirety:

https://www.chegg.com/homework-help/questions-and-answers/introduction-amarillo-division-s-regular-selling-price-falcon-6500-external-customers--sal-q44993276