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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 22,300 units at a variable cost of $51 per unit. The two divisions have recently negotiated a transfer price of $49 per unit for the 22,300 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 | $ fill in the blank 1 |
Division B | $ fill in the blank 2 |
b. What is the total increase in income for Hibiscus Company?
$ fill in the blank 3
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