pur Division makes a part that can either be sold to outside customers or transferred internally to Division Competitor for further processing. Annual data relating to this part are as follows: Annual production capacity 80.000units Demand 70.000units Selling price of the item to outside customers $35 Variable cost per unit $23 Fixed cost per unit $5 vision Competitor requires 5,000 units per year and is currently paying an outside supplier $33 per unit. e other division? If the transfer is made, $3 per unit of variable costs can be saved. What is the lowest acceptable transfer price from the viewpoint of the selling division for each of the 15,000 units needed by D 35 D $32 O s20 O $25 O $23
pur Division makes a part that can either be sold to outside customers or transferred internally to Division Competitor for further processing. Annual data relating to this part are as follows: Annual production capacity 80.000units Demand 70.000units Selling price of the item to outside customers $35 Variable cost per unit $23 Fixed cost per unit $5 vision Competitor requires 5,000 units per year and is currently paying an outside supplier $33 per unit. e other division? If the transfer is made, $3 per unit of variable costs can be saved. What is the lowest acceptable transfer price from the viewpoint of the selling division for each of the 15,000 units needed by D 35 D $32 O s20 O $25 O $23
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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