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The following information is available for Division X of Weingarten Enterprises:   Selling price to outside customers                        $74 Variable cost per unit                                           $60 Total fixed costs                                          $330,000 Capacity in units                                              29,000   Division Y would like to purchase internally from Division X. Division Y now purchases 4,400 units each year from other companies at $71 per unit. Division X has enough excess capacity to handle all of Division Y’s needs.   From the perspective of the Division X manager, what is the lowest price that should be accepted for units transferred to Division Y? ________

The following information is available for Division X of Weingarten Enterprises:   Selling price to outside customers                        $74 Variable cost per unit                                           $60 Total fixed costs                                          $330,000 Capacity in units                                              29,000   Division Y would like to purchase internally from Division X. Division Y now purchases 4,400 units each year from other companies at $71 per unit. Division X has enough excess capacity to handle all of Division Y’s needs.   From the perspective of the Division X manager, what is the lowest price that should be accepted for units transferred to Division Y? ________

Managerial Accounting
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 following information is available for Division X of Weingarten Enterprises:

 

Selling price to outside customers                        $74

Variable cost per unit                                           $60

Total fixed costs                                          $330,000

Capacity in units                                              29,000

 

Division Y would like to purchase internally from Division X. Division Y now purchases 4,400 units each year from other companies at $71 per unit. Division X has enough excess capacity to handle all of Division Y’s needs.

 

From the perspective of the Division X manager, what is the lowest price that should be accepted for units transferred to Division Y? ________

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