By how much will each division's income increase as a result of this transfer? Enter an increase as a positive number and a decrease as a negative number. Division A $fill in the blank 1 Division B $fill in the blank 2 (b) What is the total increase in income for Hibiscus Company
By how much will each division's income increase as a result of this transfer? Enter an increase as a positive number and a decrease as a negative number. Division A $fill in the blank 1 Division B $fill in the blank 2 (b) What is the total increase in income for Hibiscus Company
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The materials used by Hibiscus Company Division A are currently purchased from outside supplier at $53 per unit. Division B is able to supply Division A with 12,400 units at a variable cost of $47 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 12,400 units.
(a) By how much will each division's income increase as a result of this transfer? Enter an increase as a positive number and a decrease as a negative number.
| Division A | $fill in the blank 1 |
| Division B | $fill in the blank 2 |
(b) What is the total increase in income for Hibiscus Company?
$fill in the blank 3
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