The Pole Division produces poles which can be sold to outside customers or transferred to the Flag Division. The following data are available for last year's activities in the Pole Division: Capacity in units 400.000 poles Outside demand 385.000 poles Demand by Flag Division 25.000 poles Selling price $5.00 Variable cost $2.75 Total fixed costs $200.000 On a transfer to the Flag Division, the Pole Division can save $0.50 of the variable costs per unit transferred. What is the lowest transfer price per unit? HINT: Figure out the opportunity cost for the 10,000 units for which there is no excess capacity and average over the total units transferred. O $5.00 O $2.75 O $2.25 O 3.15 O $4.50

The Pole Division produces poles which can be sold to outside customers or transferred to the Flag Division. The following data are available for last year's activities in the Pole Division: Capacity in units 400.000 poles Outside demand 385.000 poles Demand by Flag Division 25.000 poles Selling price $5.00 Variable cost $2.75 Total fixed costs $200.000 On a transfer to the Flag Division, the Pole Division can save $0.50 of the variable costs per unit transferred. What is the lowest transfer price per unit? HINT: Figure out the opportunity cost for the 10,000 units for which there is no excess capacity and average over the total units transferred. O $5.00 O $2.75 O $2.25 O 3.15 O $4.50

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Description: Copy ofThe Pole Division produces poles which can be sold to outside customers or transferred to the Flag Division. The following data are available for last year's activities in the Pole Division:Capacity in units400,000 polesOutside demand385,000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 8P: The production of a new product required Zion Manufacturing Co. to lease additional plant...

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