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Variable cost Full cost Market price $25.00 28.00 42.00 In addition, its capacity data follow: Capacity per year Current production level 40,000 putters 30,000 putters
Variable cost Full cost Market price $25.00 28.00 42.00 In addition, its capacity data follow: Capacity per year Current production level 40,000 putters 30,000 putters Required: 1. Assuming Grover produces 3,000 putters per year, determine the overall benefit of using putters from Birdie instead of purchasing them externally. 2. Determine the maximum price that the production facility would be willing to pay to purchase the putters from Birdie. 3. Determine the minimum that Birdie will accept as a transfer price. 4. Determine the mutually beneficial transfer price for the putters. (Round your answer to 2 decimal places.) 5. If Birdie were operating at capacity, what is the minimum price it would accept? Answer is complete but not entirely correct. Total savings with Birdie putters Maximum price Grover would pay Birdie Minimum price Birdie will accept Mutually beneficial price Minimum price Birdie would accept at capacity $ 51,000 $ 42 $ 25 $ 35.00 $ 42
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