Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Post Division of Awal Company produces basic posts, which can be sold to outside customers or sold to the Lamp Division of Awal Company.

image text in transcribed

The Post Division of Awal Company produces basic posts, which can be sold to outside customers or sold to the Lamp Division of Awal Company. The following data are available for last year's activities of the Post Division The Post Division Capacity in units... Selling price per post to outside customers. Variable costs per post Fixed costs, total 300,000 posts $175 $0.90 $150,000 The Lamp Division Number of Units needed Purchase Price from Outside Suppliers 25,000 posts S1.S Required: 1. Suppose that the Post Division sells to outside customers 270,000 units. What is the lowest transfer price that would not reduce the profits of the Post Division? And what is the range of transfer? 2. Suppose that the Post Division sells to outside customers 300,000 units and the cost of packing and shipping the posts for outside customers is $0.1 per unit, these packing and shipping costs would not have to be incurred on sales of the posts to Lamp Division. What is the lowest transfer price that would not reduce the profits of the Post Division? And what is the range of transfer? LELE

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Well Church Book A Practical Guide To Mission Audit

Authors: John Finney

1st Edition

0862015499, 978-0862015497

More Books

Students also viewed these Accounting questions

Question

What is the difference between a name server and a resolver in DNS?

Answered: 1 week ago

Question

2. Describe why we form relationships

Answered: 1 week ago

Question

5. Outline the predictable stages of most relationships

Answered: 1 week ago