Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

The Post Division of the Chester Company produces basic posts which can be sold to outside customers or sold to the Lamp Division of the Chester Company . Last year the Lamp Division bought all of its 25,000 posts from Post Division. The following data are available for last year's activities of the Post Division: Capacity in units 300,000 posts Selling price per cost to outside customers $1.75 Variable costs per post $0.90 Fixed costs, total $130,000 Suppose the transfers of posts to the Lamp Division cut into sales to outside customers by 15,000 units. Further suppose that outside supplier is willing to provide the Lamp Division with basic posts for $1.45 . the lamp division thinks this price is too high and wants to buys post from the lamp division. what is the minimum price the post division is willing to charge to the lamp division

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

Global Financial Accounting And Reporting Principles And Analysis

Authors: Peter Walton, Walter Aerts

4th Edition

1473729521, 9781473729520

More Books

Students also viewed these Accounting questions

Question

Do we have a good relationship with our employee unions?

Answered: 1 week ago