Blossom Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment. Vancouver has the capacity to manufacture 330,000 units of component TR222. Vancouver's variable costs are $150 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $90 of variable costs to the component and sells the final product for $465. Consider the following independent situations: Vancouver can sell all 330,000 units of TR222 on the open market at a price of $240 per unit. Kamloops is willing to buy 33,000 of those units. What should the transfer price be? Transfer price eTextbook and Medial Of the 330,000 units of component TR222 it can produce, Vancouver can sell 231,000 units on the open market at a price of $240 per unit. Kamloops is willing to buy an additional 33,000 units. What should the minimum transfer price be? Minimum transfer price eTextbook and Media Transfer price per unit $ $ Of the 330,000 units of component TR222 it can produce, Vancouver can sell 264,000 units on the open market at a price of $240 per unit. Kamloops is willing to buy an additional 99,000 units. What should the transfer price be? (Round answer to 2 decimal places, e.g. 52.75.) per unit per unit
Blossom Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment. Vancouver has the capacity to manufacture 330,000 units of component TR222. Vancouver's variable costs are $150 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $90 of variable costs to the component and sells the final product for $465. Consider the following independent situations: Vancouver can sell all 330,000 units of TR222 on the open market at a price of $240 per unit. Kamloops is willing to buy 33,000 of those units. What should the transfer price be? Transfer price eTextbook and Medial Of the 330,000 units of component TR222 it can produce, Vancouver can sell 231,000 units on the open market at a price of $240 per unit. Kamloops is willing to buy an additional 33,000 units. What should the minimum transfer price be? Minimum transfer price eTextbook and Media Transfer price per unit $ $ Of the 330,000 units of component TR222 it can produce, Vancouver can sell 264,000 units on the open market at a price of $240 per unit. Kamloops is willing to buy an additional 99,000 units. What should the transfer price be? (Round answer to 2 decimal places, e.g. 52.75.) per unit per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blossom Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its
return on investment. Vancouver has the capacity to manufacture 330,000 units of component TR222. Vancouver's variable costs are
$150 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $90 of variable costs to the component and
sells the final product for $465.
Consider the following independent situations:
Vancouver can sell all 330,000 units of TR222 on the open market at a price of $240 per unit. Kamloops is willing to buy 33,000 of
those units.
What should the transfer price be?
Transfer price
eTextbook and Medial
Of the 330,000 units of component TR222 it can produce, Vancouver can sell 231,000 units on the open market at a price of $240
per unit. Kamloops is willing to buy an additional 33,000 units.
What should the minimum transfer price be?
Minimum transfer price
eTextbook and Media
Transfer price
per unit
$
$
Of the 330,000 units of component TR222 it can produce, Vancouver can sell 264,000 units on the open market at a price of $240
per unit. Kamloops is willing to buy an additional 99,000 units.
What should the transfer price be? (Round answer to 2 decimal places, e.g. 52.75.)
per unit
per unit
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