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Tiffany Company has two divisions, Gold and Silver. Gold produces a unit that Silver could use in its production. Silver currently is purchasing 51,000 units
Tiffany Company has two divisions, Gold and Silver. Gold produces a unit that Silver could use in its production. Silver currently is purchasing 51,000 units from an outside supplier for $35. Gold is operating at less than full capacity and has variable costs of $23.50 per unit. The full cost to manufacture the unit is $30. Gold currently sells 451,000 units at a selling price of $37. If an internal transfer is made, variable shipping and administrative costs of $2.00 per unit could be avoided. How much profit will Gold receive from the transfer if a transfer price of $32.50 is agreed upon? Multiple Choice $891,500 $280,500 $561,000 $330,500
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