11. The lumber division of concord corporation produces… The Lumber Division of Concord Corporation produces and sells lumber that can be sold to outside customers or within the companyto the Construction Division. The following data have been gathered for the coming period:Lumber Division:CapacitySelling price per board footVariable production cost per bd. ft.Variable selling cost per bd.ft.Construction Division:Board feet neededOutside price paid per bd. ft.280000 board feet$3.50$1.25$1.25$3.50$1.30$1.75$0.5060000$2.00If the Lumber Division sells to the Construction Division, $0.45 per board foot can be saved in shipping costs.If current outside sales are 130000 board feet, what is the minimum transfer price that the Lumber Division should accept?

Introduction:- Transfer pricing measures to the prices of goods and services that are exchanged…

If the Lumber Division sells to the Construction Division, $0.45 per board foot can be saved in shipping costs. If current outside sales are 130000 board feet, what is the minimum transfer price that the Lumber Division should accept? $1.25 $3.50 $1.30

If the Lumber Division sells to the Construction Division, $0.45 per board foot can be saved in shipping costs. If current outside sales are 130000 board feet, what is the minimum transfer price that the Lumber Division should accept? $1.25 $3.50 $1.30

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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Question

11. The lumber division of concord corporation produces…

The Lumber Division of Concord Corporation produces and sells lumber that can be sold to outside customers or within the company
to the Construction Division. The following data have been gathered for the coming period:
Lumber Division:
Capacity
Selling price per board foot
Variable production cost per bd. ft.
Variable selling cost per bd.ft.
Construction Division:
Board feet needed
Outside price paid per bd. ft.
280000 board feet
$3.50
$1.25
$1.25
$3.50
$1.30
$1.75
$0.50
60000
$2.00
If the Lumber Division sells to the Construction Division, $0.45 per board foot can be saved in shipping costs.
If current outside sales are 130000 board feet, what is the minimum transfer price that the Lumber Division should accept?

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