he materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $54 per unit. Division B is able to supply Division A with 14,400 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $51 per unit for the 14,400 units. Enter an increase as a positive number and a decrease as a negative number. a. By how much will each division's income increase as a result of this transfer? Division A $ Division B $ b. What is the total increase in income for Hibiscus Company?
he materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $54 per unit. Division B is able to supply Division A with 14,400 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $51 per unit for the 14,400 units. Enter an increase as a positive number and a decrease as a negative number. a. By how much will each division's income increase as a result of this transfer? Division A $ Division B $ b. What is the total increase in income for Hibiscus Company?
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 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...
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The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $54 per unit. Division B is able to supply Division A with 14,400 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $51 per unit for the 14,400 units. Enter an increase as a positive number and a decrease as a negative number.
a. By how much will each division's income increase as a result of this transfer?
| Division A | $ |
| Division B | $ |
b. What is the total increase in income for Hibiscus Company?
$
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