Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market Selling price per unit (on the outside market) Variable cost per unit Fixed costs per unit (based on capacity) Capacity in units $102.00 $ 68.00 $ 10.00 30,000 Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. If Division A is currently selling 27,000 units on the outside market, what is the lowest acceptable transfer price for Division A if it were to sell 5,000 units to the other division? Multiple Choice $79.00 $89.00 $92.00 $81.60
Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market Selling price per unit (on the outside market) Variable cost per unit Fixed costs per unit (based on capacity) Capacity in units $102.00 $ 68.00 $ 10.00 30,000 Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. If Division A is currently selling 27,000 units on the outside market, what is the lowest acceptable transfer price for Division A if it were to sell 5,000 units to the other division? Multiple Choice $79.00 $89.00 $92.00 $81.60
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market
Selling price per unit (on the outside market)
Variable cost per unit
Fixed costs per unit (based on capacity)
Capacity in units
$102.00
$ 68.00
$ 10.00
30,000
Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. If Division A is
currently selling 27,000 units on the outside market, what is the lowest acceptable transfer price for Division A if it were to sell 5,000 units to
the other division?
Multiple Choice
$79.00
$89.00
$92.00
$81.60
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