What is the minimum transfer price that will maximize corporate profits?

Q: XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit,…

A: Contribution margin is the price of the product deduct all the linked variable costs, results from…

Q: The Can Division of Concord Corporation manufactures and sells tin cans externally for $ 0.70 per…

A: Formula: Minimum transfer price = Unit variable cost - Selling internally will save  cost

Q: Nytre Limited sells executive office chairs for a price of $195 each. The contribution margin ratio…

A: The targeted sales are calculated as sum of fixed cost and target profit divided by contribution…

Q: Among its divisions, Textron Inc., owns Kelly Aerospace, and Cessna Aircraft. The company is…

A: A. As the manufacturing capacity is 25000, even after supplying to customer 20000 magnetos there…

Q: Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit sales price.…

A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…

Q: A moped company produces 200,000 units a year and expects output levels to remain steady in the…

A: IRR is a technique of capital budgeting which helps in decision making with regards to selection of…

Q: The Arthur Company manufactures kitchen utensils. The company is currently producing well below its…

A: The cost can be classified into two categories i.e fixed cost and variable cost. The  FIxed cost…

Q: Wetherald Products, Incorporated, has a Pump Division that manufactures and sells a number of…

A: Minimum Acceptable Transfer Price :— It is the variable cost plus opportunity costs.    If the…

Q: Daffy Duct, Inc., has the capacity to produce 12,000 cases of duct tape per year but only produces…

A: Answer = $5,000 (profit)   Computation of additional Operating Income / (Loss) accepting new offer…

Q: Elkins, a manufacturer of ice makers, realizes a cost of $250 for every unit it pro- duces. Its…

A: The conceptual formula used:

Q: Costa Company has a capacity of 40,000 units per year and is currently selling 35,000 for $400 each.…

A: Special order are acceptable to the extent if they bring incremental profits in the company. The…

Q: Memex Corp. manufactures memory expansion boards for microcomputers. The average selling price of…

A: Break-Even sales revenue = Fixed cost /Contribution margin ratio  Contribution margin per unit =…

Q: Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its…

A: Solution a: Operating profit will increase by = (outside purchase price - variable cost per unit) *…

Q: Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit sales price.…

A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…

Q: Holmes Company produces a product that can be either sold as is or processed further. Holmes has…

A:

Q: Quest Motors, Inc., operates as a decentralized multidivision company. The Vivo division of Quest…

A: Transfer Price, when used internally, takes into the following consideration: 1. Incremental costs…

Q: The market price for a product has been $50 per unit, but competitive pressures have reduced the…

A: Manufacturing costs: Manufacturing costs are the costs which are involved in converting the raw…

Q: The Can Division of Marigold Corp. manufactures and sells tin cans externally for $0.60 per can. Its…

A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…

Q: how many units must Tony sell to breakeven?

A: Breakeven sales is the sales at which there is no profit or no loss. Breakeven point = Fixed cost/…

Q: A company has a process that results in 14000 pounds of Product A that can be sold for $8 per pound.…

A: Sales value if sold now = 14,000 x 8 = 112,000   Increase in sales value if processed further =…

Q: Gelb Company currently manufactures 46,500 units per year of a key component for its manufacturing…

A: Formula: Total Variable cost = Variable cost per unit x number of units Number of units to be…

Q: The Mad Hatter Company owns a machine that manufactures two types of chimney caps. Production time…

A: The calculation of contribution margin for Cap A and Cap B has been made as follows:

Q: Campbell Company, which produces and sells a small digital clock, bases its pricing strategy on a 20…

A: Differential analysis or incremental analysis is an accounting technique used by management. In…

Q: The Can Division of Crane Company manufactures and sells tin cans externally for $0.70 per can. Its…

A: Minimum Transfer price = Variable Cost + Opportunity cost - Cost saving if sold internally

Q: The Wood Division of Bramble Corp. manufactures rubber moldings and sells them externally for $50.…

A: Transfer pricing: The amount charged when one division sells the goods or services to another…

Q: The Wood Division of Vaughn Manufacturing manufactures rubber moldings and sells them externally for…

A: Given, Variable cost is = $ 25 per unit Fixed cost is = $ 8 per unit Division to transfer = 4300…

Q: The Alpha Company produces microchips used in cellphones. Each microchip is priced at P45 and the…

A: The relevant cost is the cost incurred for the special order. The relevant cost in this case, will…

Q: Saturn Company produces 1,000 parts per year, which are used in the assembly of one of its products.…

A: PLEASE GIVE A LIKE YOUR RESPONSE MATTERS  THE CORRECT ANSWER IS OPTION (C) $2,000 decrease

Q: Division X of Charter Corporation makes and sells a single product that's used by manufacturers of…

A: Charter Corporation has two Divisions X & Y Division X total Capacity = 20000 units Outside…

Q: Schweser Satellites Inc. produces satellite earth stations that sell for $105,000 each. The firm's…

A: Answer with ll calculations are as follows

Q: he Wood Division of Sheridan Company manufactures rubber moldings and sells them externally for $55.…

A: Internal transfer means where one independent department is transferring the goods to another…

Q: MicroCam produces a single product. Variable cost per unit is $25, and fixed costs are $95,000 per…

A: Sales at desired profit=Fixed cost+Desired profitSelling price-Variable cost per unit

Q: Orange is currently buying 50,000 motherboard from MotherBoard, Inc. at a price of P65 per board.…

A: Solution: Total cost to buy = units * purchase price = 50000*65 = 3250000 Total costs to make =…

Q: The clock division of Control Central Corporation manufactures clocks and then sells them to…

A: Transfer pricing can be defined as the setting of the price for goods and services sold between…

Q: Newman Company currently produces and sells 7,000 units of a product that has a contribution margin…

A: Target Profit: It refers to the desired amount of profit that a company expects to achieve by the…

Q: Nelson Company's Radio Division currently is purchasing transistors from Charlotte Co. for $3.50…

A: Formula: Total cost = Variable cost + Fixed cost Sum of variable and fixed cost derives the total…

Q: Dull Corporation produces 8,000 parts each year, which are used in the production of one of its…

A: Give, Purchase price = $28 Fixed cost if purchased from outside = $20 - ($20*1/4) Fixed cost if…

Q: McPupper Steel has products that cost $10,500 to manufacture. The products can be sold as is for…

A: Incremental profit is the profit or loss associated with the change in the decision. The positive…

Q: Suppose that Division T can sell only 10,000 timers to outside customers. What is the lowest…

A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: Yorkville sells a haircutter at $65 and each unit has variable cost of $25. Yorkville's fixed…

A: Calculation of the Incremental net income:- Incremental net income = Incremental Revenue -…

Q: Chile's, Inc. currently produces and sells 4,000 units of a product that has a contribution margin…

A: Break even point means a point where firm is neither earning profit nor incurring any loss. For…

Q: Alcatraz Division of XYZ Corp. sells 80,000 units of part X to the outside market. Part X sells for…

A: In the given question, Alcatraz division is selling 10,000 units to Capone division at $ 40 per…

Q: Chile’s, Inc. currently produces and sells 4,000 units of a product that has a contribution margin…

A: We know that under marginal costing  Profit = Sales Revenue - Total Variable cost - Total Fixed…

Q: The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The…

A: Note: As per general rule, in the case of sufficient capacity available, the minimum transfer price…

Q: Tony Company is contemplating of marketing a new product. Fixed costs will be P800,000 for…

A: Breakeven point is described as the point of level of production where the total expenses equal the…

Q: McKenzie Company can sell 20,000 pounds of product for $10 per pound. The company can also process…

A: Sometimes additional profit can be made by incurring additional expenditure on the product already…

Q: . What is the minimum transfer price that the Engine Division should accept? ______________ 15. What…

A: Transfer pricing refers to the price at which the goods and services are exchanged within the…

Q: Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of…

A: The differential analysis is performed when two alternatives are available with the organisation.

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.