Question
The Selling Divisions unit sales price is $37 and its unit variable cost is $15. Its capacity is 11000 units. Fixed costs per unit are
The Selling Divisions unit sales price is $37 and its unit variable cost is $15. Its capacity is 11000 units. Fixed costs per unit are $8. Current outside sales are 9000 units. What is the Selling Divisions opportunity cost per unit from selling 3000 units to the Purchasing Division?
| -$0 |
| -$37 |
| -$22 |
| -$14 |
The Can Division of Marigold Corp. manufactures and sells tin cans externally for $1.00 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.18, respectively. The Packaging Division wants to purchase 50,000 cans at $0.42 a can. Selling internally will save $0.04 a can. Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?
| -$0.20 |
| -$0.38 |
| -$0.24 |
| -$0.42 |
The Can Division of Sheridan Company manufactures and sells tin cans externally for $0.80 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.12, respectively. The Packaging Division wants to purchase 50,000 cans at $0.36 a can. Selling internally will save $0.07 a can. Assuming the Can Division is already operating at full capacity, what is the minimum transfer price it should accept?
| -$0.79 |
| -$0.44 |
| -$0.73 |
| -$0.43 |
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