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The Windshield division of Fast Car Co. makes windshields for use in Fast Cars Assembly division. The Windshield division incurs variable costs of $200 per
The Windshield division of Fast Car Co. makes windshields for use in Fast Cars Assembly division. The Windshield division incurs variable costs of $200 per windshield and has capacity to make 500,000 windshields per year. The market price is $450 per windshield. The Windshield division incurs total fixed costs of $3,000,000 per year. |
Assume the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions? |
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