The Post Division of Awal Company produces basic posts, which can be sold to outside customers or sold to the Lamp Division of Awal Company. The following data are available for last year's activities of the Post Division: The Post Division: Capacity in units. Selling price per post to outside customers Variable costs per post. 300,000 posts $1.75 S0.90 $150.000 Fixed costs, total. The Lamp Division Number of Units needed Purchase Price from Outside Suppliers 25,000 posts $1.5 Required: 1. Suppose that the Post Division sells to outside customers 270,000 units. What is the lowest transfer price that would not reduce the profits of the Post Division? And what is the range of transfer? 2. Suppose that the Post Division sells to outside customers 300,000 units and the cost of packing and shipping the posts for outside customers is $0.1 per unit, these packing and shipping costs would not have to be incurred on sales of the posts to Lamp Division. What is the lowest transfer price that would not reduce the profits of the Post Division? And what is the range of transfer For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

The Post Division of Awal Company produces basic posts, which can be sold to outside customers or sold to the Lamp Division of Awal Company. The following data are available for last year's activities of the Post Division: The Post Division: Capacity in units. Selling price per post to outside customers Variable costs per post. 300,000 posts $1.75 S0.90 $150.000 Fixed costs, total. The Lamp Division Number of Units needed Purchase Price from Outside Suppliers 25,000 posts $1.5 Required: 1. Suppose that the Post Division sells to outside customers 270,000 units. What is the lowest transfer price that would not reduce the profits of the Post Division? And what is the range of transfer? 2. Suppose that the Post Division sells to outside customers 300,000 units and the cost of packing and shipping the posts for outside customers is $0.1 per unit, these packing and shipping costs would not have to be incurred on sales of the posts to Lamp Division. What is the lowest transfer price that would not reduce the profits of the Post Division? And what is the range of transfer For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

Name: The Post Division of Awal Company produces basic posts, which can be
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Description: The Post Division of Awal Company produces basic posts, which can be sold to outside customers or sold to the Lamp Division of Awal Company. The following data are available for last year's activities of thePost Division:The Post Division:Capacity i

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...

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