Question
The materials used by the Hibiscus Company Division A are currently purchased from outside supplier at $53 per unit. Division B is able to supply
The materials used by the Hibiscus Company Division A are currently purchased from outside supplier at $53 per unit. Division B is able to supply Division A with 11,900 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 11,900 units. By how much will each division's income and the company's total income change as a result of this transfer? Enter an increase as a positive number and a decrease as a negative number.
Change in income for Division A $
Change in income for Division B $ Total change in income for Hibiscus Company $
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