English company operates two segments, the Reading Segment, and the Language Segment. Reading Segment produces component A that is necessary in the processing of the products offered by Language Segment but can also be sold to outside customers. English 10,000 undecided to transfer to from Reading to Language at with special modification to Language at P70.00 Reading currently sells the component A to external customers at P120.00. Variable Cost per unit is P43 and fixed cost per unit based on normal operations is at P12. Reading is currently operating at full capacity and the VC in producing component A is at P68. How much is the minimum Transfer price that Reading can accept?
English company operates two segments, the Reading Segment, and the Language Segment. Reading Segment produces component A that is necessary in the processing of the products offered by Language Segment but can also be sold to outside customers. English 10,000 undecided to transfer to from Reading to Language at with special modification to Language at P70.00 Reading currently sells the component A to external customers at P120.00. Variable Cost per unit is P43 and fixed cost per unit based on normal operations is at P12. Reading is currently operating at full capacity and the VC in producing component A is at P68. How much is the minimum Transfer price that Reading can accept?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
English company operates two segments, the Reading Segment, and the Language Segment. Reading Segment produces component A that is necessary in the processing of the products offered by Language Segment but can also be sold to outside customers.
English 10,000 undecided to transfer to from Reading to Language at with special modification to Language at P70.00
Reading currently sells the component A to external customers at P120.00. Variable Cost per unit is P43 and fixed cost per unit based on normal operations is at P12. Reading is currently operating at full capacity and the VC in producing component A is at P68.
How much is the minimum Transfer price that Reading can accept?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education