Chen Company's Small Motor Division manufactures a number of small motors used in household and office appliances. The Household Division of Chen then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell any of their components internally or externally. The following costs relate to small motor LN233 on a per unit basis. Fixed cost per unit Variable cost per unit Selling price per unit $5.00 $11.00 $35.00 Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small motor LN233 to the Household Division (Round answer to 2 decimal places, eg 10.50) Minimum transfer price $ eTextbook and Media 35 per unit

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Chen Company's Small Motor Division manufactures a number of small motors used in household and office appliances. The
Household Division of Chen then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell
any of their components internally or externally. The following costs relate to small motor LN233 on a per unit basis.
Fixed cost per unit
Variable cost per unit
Selling price per unit
$5,00
$11.00
$35.00
Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small
motor LN233 to the Household Division. (Round answer to 2 decimal places, eg. 10.50)
Minimum transfer price $
eTextbook and Media
35
per unit
Transcribed Image Text:Chen Company's Small Motor Division manufactures a number of small motors used in household and office appliances. The Household Division of Chen then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell any of their components internally or externally. The following costs relate to small motor LN233 on a per unit basis. Fixed cost per unit Variable cost per unit Selling price per unit $5,00 $11.00 $35.00 Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small motor LN233 to the Household Division. (Round answer to 2 decimal places, eg. 10.50) Minimum transfer price $ eTextbook and Media 35 per unit
Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small
motor LN233 to the Household Division. (Round answer to 2 decimal places, e.g. 10.50.)
Minimum transfer price
eTextbook and Media
35
Minimum transfer price $
per unit
Assuming that the Small Motor Division does not have excess capacity, compute the minimum acceptable price for the transfer of
the small motor to the Household Division. (Round answer to 2 decimal places, e.g. 10.50.)
Transcribed Image Text:Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small motor LN233 to the Household Division. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price eTextbook and Media 35 Minimum transfer price $ per unit Assuming that the Small Motor Division does not have excess capacity, compute the minimum acceptable price for the transfer of the small motor to the Household Division. (Round answer to 2 decimal places, e.g. 10.50.)
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