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Use the following information for the next FIVE questions. Schwartz Corporation has two divisions, S and T. Division T makes a timer which has the
Use the following information for the next FIVE questions. Schwartz Corporation has two divisions, S and T. Division T makes a timer which has the following data per timer: variable cost $15 /unit fixed cost $10/ unit (based on the monthly capacity of 12,000 timers) selling price $30/ unit (to outside customers) Presently division S is buying 5,000 timers per month from an overseas supplier at $27 each, and Division T is selling its entire capacity of 12,000 timers per month to outside customers. Division T is considering selling 5,000 timers per month to division S. Division T has no cost savings when it sells to S. 4. Suppose instead that division T can only sell 6,000 timers to outside customers. From the standpoint of division T, what is the minimum acceptable transfer price in order to sell 5,000 timers to division S ? a. $15/ unit b. \$25/unit c. $27/ unit d. $30/ unit 5. Suppose instead that division T can only sell 10,000 timers to outside customers. From the standpoint of division T, what is the minimum acceptable transfer price in order to sell 5,000 timers to division S ? a. $20.20 /unit b. \$21/unit c. $19.80 /unit d. \$24/unit
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