Buenos Company has two divisions, Division X and Division Y. Division X has a production capacity of 6,000 units per month. Division X sells 4,600 units each month to outside customers, earning a contribution margin of $36 per unit. Division Y would like to buy 2,000 units each month from Division X. How much must Division X add to the transfer price to recover the margin given up from lost external sales? a. $25.20. b. $36.00. c. $5.40. d. $10.80.

Buenos Company has two divisions, Division X and Division Y. Division X has a production capacity of 6,000 units per month. Division X sells 4,600 units each month to outside customers, earning a contribution margin of $36 per unit. Division Y would like to buy 2,000 units each month from Division X. How much must Division X add to the transfer price to recover the margin given up from lost external sales? a. $25.20. b. $36.00. c. $5.40. d. $10.80.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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