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Use the following information for questions 57 and 58. The Can Division of Fruit Products manufactures and sells tin cans externally for 0.60 per can.
Use the following information for questions 57 and 58. The Can Division of Fruit Products manufactures and sells tin cans externally for 0.60 per can. Its unit variable costs and unit fixed costs are 0.24 and 0.08, respectively. The Packaging Division wants to purchase 50,000 cans at 0.32 a can. Selling internally will save 0.02 a can. 57. Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept? a. 0.24 b. 0.32 c. 0.22 d. 0.30 Ans: c, LO: 4, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA FC: Decison Modeling, IMA: Decision Analysis 58. Assuming the Can Division is already operating at full capacity, what is the minimum transfer price it should accept? a. 0.58 b. 0.66 c. 0.28 d. 0.34
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