(PT 1) Division A has variable manufacturing costs of $65 per unit and fixed costs of...
(PT 1) Division A has variable manufacturing costs of $65 per unit and fixed costs of $14 per unit. Assuming that Division A is operating at capacity, what is the optimal transfer price of an internal transfer when the market price is $82?
(PT 2) Division A has variable manufacturing costs of $68 per unit and fixed costs of $17 per unit. Assuming that Division A is operating significantly below capacity, what is the optimal transfer price of an internal transfer when the market price is $89?
Homework Answers
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1. As the division is operating at capacity, Optimal transfer price = Market price = $82 |
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2. As the division is operating significantly below the capacity, Optimal transfer price = Variable Manufacturing cost = $68 |
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(PT 1) Division A has variable manufacturing costs of $65 per
unit and fixed costs of...
Division A has variable manufacturing costs of $53 per unit and fixed costs of $14 per...
Division A has variable manufacturing costs of $53 per unit and fixed costs of $14 per unit. Assuming that Division A is operating significantly below capacity, what is the optimal transfer price of an internal transfer when the market price is $80? $28. $27. $53. $67. (Pt 2) Division B has variable manufacturing costs of $58 per unit and fixed costs of $14 per unit. Assuming that Division B is operating significantly below capacity, what is the opportunity cost of...
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Division A has variable manufacturing costs of $53 per unit and fixed costs of $14 per unit. Assuming that Division...
Division A has variable manufacturing costs of $53 per unit and fixed costs of $14 per unit. Assuming that Division A is operating at capacity, what is the optimal transfer price of an internal transfer when the market price is $80? O $28. O $27. OO
Division A has variable manufacturing costs of $51 per unit and fixed costs of $11 per...
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Division A has variable manufacturing costs of $61 per unit and fixed costs of $14 per...
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Division A has variable manufacturing costs of $53 per unit and fixed costs of $14 per unit. Assuming that Division A is operating at capacity, what is the optimal transfer price of an internal transfer when the market price is $80? O $28. O $27. OO
Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units $ $ 100 82 8 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Divisic year. It has received a quote of $97 per speaker from another manufacturer. Sako Company evaluate of divisional profits. Required: 1. Assume the Audio Division sells only 20,000 speakers per year to outside...
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