capacity variable cost of windshield: variable cost of car Bilbo Sells cars to the following: The Shire Autoplex Froto Windshield Division Prancing Pony Autos Cars of Rivendale Situation 1: Situation 2: Situation 3: 80,000 windshields $400 20,000 cars at $14,000 each 20,000 cars at $13,000 each 10,000 cars at $12,600 each Bilbo Car Company 50,000 cars $12,000 plus cost of windshield Because Hobbit Cars are a unique size and shape, there is no outside market for Froto's Windshields a) What transfer price should be used to 'sell' windshields to Bilbo? b) How many cars should Bilbo make and sell? c) how do you evaluate Froto and Bilbo (cost, revenue, or profit center)? MordorZone, the Middle Earth's largest auto supply store wants to buy up to 80,000 windshields from Froto at $900 each a) How many windsheilds should be sold to MordorZone to maximize Hobbit profits? b) What transfer price should be used to sell windshields to Bilbo? C) How many cars should Bilbo make and sell? d) How do you evaluate Froto and Bilbo (cost, revenue, or profit center)? You are Gandoff, CEO of Hobbit Car Emporium and MordorZone, the Middle Earth's largest auto supply store want to buy up to 30,000 windshields from Froto at $900 each a) How many windshields should be sold to MordorZone to maximize Hobbit Profits? b) What transfer price should be used to 'sell' windshields to Bilbo? c) How many cars should Bilbo make and sell? d) How do you evaluate Froto and Bilbo (cost, revenue or profit center)?
capacity variable cost of windshield: variable cost of car Bilbo Sells cars to the following: The Shire Autoplex Froto Windshield Division Prancing Pony Autos Cars of Rivendale Situation 1: Situation 2: Situation 3: 80,000 windshields $400 20,000 cars at $14,000 each 20,000 cars at $13,000 each 10,000 cars at $12,600 each Bilbo Car Company 50,000 cars $12,000 plus cost of windshield Because Hobbit Cars are a unique size and shape, there is no outside market for Froto's Windshields a) What transfer price should be used to 'sell' windshields to Bilbo? b) How many cars should Bilbo make and sell? c) how do you evaluate Froto and Bilbo (cost, revenue, or profit center)? MordorZone, the Middle Earth's largest auto supply store wants to buy up to 80,000 windshields from Froto at $900 each a) How many windsheilds should be sold to MordorZone to maximize Hobbit profits? b) What transfer price should be used to sell windshields to Bilbo? C) How many cars should Bilbo make and sell? d) How do you evaluate Froto and Bilbo (cost, revenue, or profit center)? You are Gandoff, CEO of Hobbit Car Emporium and MordorZone, the Middle Earth's largest auto supply store want to buy up to 30,000 windshields from Froto at $900 each a) How many windshields should be sold to MordorZone to maximize Hobbit Profits? b) What transfer price should be used to 'sell' windshields to Bilbo? c) How many cars should Bilbo make and sell? d) How do you evaluate Froto and Bilbo (cost, revenue or profit center)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:capacity
variable cost of windshield:
variable cost of car
Bilbo Sells cars to the following:
The Shire Autoplex
Froto Windshield Division
Prancing Pony Autos
Cars of Rivendale
Situation 1:
Situation 2:
Situation 3:
80,000 windshields
$400
20,000 cars at $14,000 each
20,000 cars at $13,000 each
10,000 cars at $12,600 each
Bilbo Car Company
50,000 cars
BUDGET
$12,000 plus cost of windshield
Because Hobbit Cars are a unique size and shape, there is no outside market for Froto's Windshields
a) What transfer price should be used to 'sell' windshields to Bilbo?
b) How many cars should Bilbo make and sell?
c) how do you evaluate Froto and Bilbo (cost, revenue, or profit center)?
MordorZone, the Middle Earth's largest auto supply store wants to buy up to 80,000 windshields from Froto at $900 each
a) How many windsheilds should be sold to MordorZone to maximize Hobbit profits?
b) What transfer price should be used to 'sell' windshields to Bilbo?
C) How many cars should Bilbo make and sell?
d) How do you evaluate Froto and Bilbo (cost, revenue, or profit center)?
You are Gandoff, CEO of Hobbit Car Emporium and MordorZone, the Middle Earth's largest auto supply store want to buy up to 30,000 windshields
from Froto at $900 each
a) How many windshields should be sold to MordorZone to maximize Hobbit Profits?
b) What transfer price should be used to sell windshields to Bilbo?
c) How many cars should Bilbo make and sell?
d) How do you evaluate Froto and Bilbo (cost, revenue or profit center)?
standard
transfer
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