The materaial used by the Multinomah Division of Isbister Company are currently purchased from outside supplier at $90 per unit. The same material are produced by the Pembroke Division. The Pembroke Divisin can produced the materails needed by the Multinomah Division at a variable cost of $75 per unit. The division currently producing 120,000 units and has capacity of 150,000 units. The two division have recently negotiated a transfer price of $82 per unit for 15,000 units. By how uch will each division's income increase as a resut of the transfer?
The materaial used by the Multinomah Division of Isbister Company are currently purchased from outside supplier at $90 per unit. The same material are produced by the Pembroke Division. The Pembroke Divisin can produced the materails needed by the Multinomah Division at a variable cost of $75 per unit. The division currently producing 120,000 units and has capacity of 150,000 units. The two division have recently negotiated a transfer price of $82 per unit for 15,000 units. By how uch will each division's income increase as a resut of the transfer?
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 materaial used by the Multinomah Division of Isbister Company are currently purchased from outside supplier at $90 per unit. The same material are produced by the Pembroke Division. The Pembroke Divisin can produced the materails needed by the Multinomah Division at a variable cost of $75 per unit. The division currently producing 120,000 units and has capacity of 150,000 units. The two division have recently negotiated a transfer price of $82 per unit for 15,000 units. By how uch will each division's income increase as a resut of the transfer?
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