Question
The Calculator Division of Henderson Company manufactures handheld calculators. The Calculator Division can either purchase batteries from an outside vendor for $14 per battery or
The Calculator Division of Henderson Company manufactures handheld calculators. The Calculator Division can either purchase batteries from an outside vendor for $14 per battery or from the Battery Division of Henderson Company. They require 10,000 batteries per period. The Battery Division sells the batteries to outside customers for $18 per battery. They have been selling 90,000 batteries per period. Their variable costs are $12 per battery and the fixed costs are $2 per battery. Required: 1. If a transfer price is negotiated, what is the maximum purchase price per battery that the Calculator Division would be willing to pay? 2. For each case below, determine the minimum selling price per battery the Battery Division would be willing to accept and then indicate whether a negotiated transfer price can be reached. Case 1 The Battery Division has a maximum capacity of 120,000 batteries. The minimum per battery selling price the Battery Division would accept is be reached? (type yes or no) Will a negotiated transfer Case 2 ctice Exa....pdf DEC 14 Capital Budgeti....pdf A Capital Budgeting.pdf R MacBook Air would be willing to accept and then indicate whether a negotiated transfer price can be reached. Case 1 The Battery Division has a maximum capacity of 120,000 batteries. The minimum per battery selling price the Battery Division would accept is be reached? (type yes or no) Case 2 Will a negotiated transfer The Battery Division has a maximum capacity of 90,000 batteries. The minimum per battery selling price the Battery Division would accept is Will a negotiated transfer price be reached? (Type yes or no) Case 3 The Battery Division has a maximum capacity of 97,000 batteries. The minimum per battery selling price the Battery Division would accept is reached? (Type yes or no) Will a negotiated transfer price be Practice Exa....pdf 4 Capital Budgeti....pdf Capital Budgeting.pdf 3
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