Please help with question 4 Please! Capacity in unitsSelling price to outside customers on the intermediate marketVariable costs per unitFixed costs per unit (based on capacity)200,000$ 21$ 12$ 9The company has a Pump Division that could use this valve in the manufacture of one of its pumps. The Pump Division is currentlypurchasing 20,000 valves per year from an overseas supplier at a cost of $20 per valve.1. Assume that the Valve Division has ample idle capacity to handle all of the Pump Division's needs. What is the acceptable range, ifany, for the transfer price between the two divisions?$12Transfer price s$202. Assume that the Valve Division is selling all that it can produce to outside customers on the intermediate market. What is theacceptable range, if any, for the transfer price between the two divisions?.......2$21Transfer price$20 3. Assume again that the Valve Division is selling all that it can produce to outside customers on the intermediate market. Also assumethat $2 in variable expenses can be avoided on transfers within the company, due to reduced selling costs. What is the acceptablerange, if any, for the transfer price between the two divisions?2$19Transfer price s$204. Assume the Pump Division needs 30,000 special high-pressure valves per year. The Valve Division's variable costs to manufactureand ship the special valve would be $11 per unit. To produce these special valves, the Valve Division would have to reduce itsproduction and sales of regular valves from 200,000 units per year to 150,000 units per year. As far as the Valve Division is concerned,what is the lowest acceptable transfer price? (Round your answer to 2 decimal places.)Transfer price

Transfer pricing is a form of accounting that represents when goods or services are exchanged…

Answered: Capacity in units Selling price to…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 6BE

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Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
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Product Mix Decision, Single Constraint Norton Company produces two products (Juno and Hera) that use the same material input. Juno uses two pounds of the material for every unit produced, and Hera uses five pounds. Currently, Norton has 16,000 pounds of the material in inventory. All of the material is imported. For the coming year, Norton plans to import an additional 8,000 pounds to produce 2,000 units of Juno and 4,000 units of Hera. The unit contribution margin is 30 for Juno and 60 for Hera. Also, assume that Nortons marketing department estimates that the company can sell a maximum of 2,000 units of Juno and 4,000 units of Hera. Norton has received word that the source of the material has been shut down by embargo. Consequently, the company will not be able to import the 8,000 pounds it planned to use in the coming years production. There is no other source of the material. Required: 1. Compute the total contribution margin that the company would earn if it could manufacture 2,000 units of Juno and 4,000 units of Hera. 2. Determine the optimal usage of the companys inventory of 16,000 pounds of the material. Compute the total contribution margin for the product mix that you recommend.

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