Question
The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $55 per unit. Division B is able to supply
The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $55 per unit. Division B is able to supply Division A with 10,400 units at a variable cost of $53 per unit. The two divisions have recently negotiated a transfer price of $52 per unit for the 10,400 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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