Sam's X Division is currently purchasing a part from an outside supplier. The company's Y Division, which has excess capacity, makes and sells this part for external customers at a variable cost of P22 and a selling price of P34. If Y begins sales to X, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by P2. If sales to outsiders will not be affected, Y would establish a transfer p

Sam's X Division is currently purchasing a part from an outside supplier. The company's Y Division, which has excess capacity, makes and sells this part for external customers at a variable cost of P22 and a selling price of P34. If Y begins sales to X, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by P2. If sales to outsiders will not be affected, Y would establish a transfer p

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 18E

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