Question
The Rubber Division of Morgan Company manufactures rubber moldings and sells them externally for $50. Its variable cost is $20 per unit, and its fixed
The Rubber Division of Morgan Company manufactures rubber moldings and sells them externally for $50. Its variable cost is $20 per unit, and its fixed cost per unit is $7. Morgan's president wants the Rubber Division to transfer 5,000 units to another company division at a price of $27. Assuming the Rubber Division has available capacity for 5,000 additional units, the economic rule would set transfer price as:
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen and Peter Brewer
14th edition
978-007811100, 78111005, 978-0078111006
