vco is a division of international motor,an automobile manufacturr. VCO prodeces car radio/CD player sells its products to other division of internationalbas well as to other car manufacture abd electronics distribution. the following information is avalable regart VCO car radio/cd player. selling price of car radio/cd player to external customer $49 variable cost per unit $28 capacity 200.000 unit

VCO is a division of International Motors, an automobile manufacturer. VCO produces car radio/CD players. VCO sells its products to other divisions of International Motors, as well as to other car manufacturers and electronics distributors. The following information is available regarding VCO's car radio/CD player. Selling price of car radio CD player to extemal customers $49 Variable cost per unit $28 Capacity 200,000 units | Required: Determine whether the goods should be transferred internally or purchased extemally and what the appropriate transfer price should be under each of the following independent situations. fa) VCO is operating at full capacity. There is a saving of $4 por unit for variable cost if the car radio is made for internal sale. Intemational Motors can purchase a comparable car radio from an outside supplier for $47. (b) VCO has sufficient existing capacity to meet the needs of International Motors, International Motors can purchase a comparable car radio from an outside supplier for $47. (c) Intemational Motors wants to purchase a special-order car radio/CD player with additional features. It needs 45,000 units. VCO has determined that the additional variable cost would be $12 per unit. VCO has no spare capacity. It will have to forgo sales of 15 000 units to external parties in order to provide this special order