Question
The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $52 per unit. Division B is able to supply
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The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $52 per unit. Division B is able to supply Division A with 18,300 units at a variable cost of $47 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 18,300 units. Enter an increase as a positive number and a decrease as a negative number.
a. By how much will each division's income increase as a result of this transfer?
Division A $ Division B $
b. What is the total increase in income for Hibiscus Company?
$
The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $52 per unit. Division B is able to supply Division A with 18,300 units at a variable cost of $47 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 18,300 units. Enter an increase as a positive number and a decrease as a negative number.
a. By how much will each division's income increase as a result of this transfer?
| Division A | $ |
| Division B | $ |
b. What is the total increase in income for Hibiscus Company?
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The Brain Audit Why Customers Buy And Why They Dont
Authors: Sean D'Souza, John Forde
1st Edition
0473175045, 978-0473175047
