Determine minimum transfer price under different situations.E9.27 (LO 6) The cycle division of TravelFast Company has the following cost data per unit for its mostrecent cycle, the Roadbuster:Selling priceVariable cost of goods soldBody frameOther variable costsContribution margin$300$2,200900 1,200$1,000The cycle division currently buys its body frames from an outside supplier. However, TravelFast has anotherdivision, FrameBody, that makes body frames for other cycle companies. The cycle division believes thatFrameBody's product is suitable for its new Roadbuster cycle. FrameBody sells its frames to outsidecustomers for $350 per unit. The variable cost for FrameBody is $250. The cycle division is willing to pay$275 to purchase the frames from FrameBody.Instructionsa. Assume that FrameBody has excess capacity and is able to meet all of the cycle division's needs. If thecycle division buys 1,000 frames from FrameBody, determine the following: (1) the effect on the cycledivision's income; (2) the effect on FrameBody's income; and (3) the effect on TravelFast's income.b. Assume that FrameBody does not have excess capacity and therefore would lose sales if it sold theframes to the cycle division. If the cycle division buys 1,000 frames from FrameBody, determine thefollowing: (1) the effect on the cycle division's income; (2) the effect on FrameBody's income; and (3)the effect on TravelFast's income.

Transfer pricing is the practice under which a price is determined and the goods and services are…

Answered: Instructions a. Assume that FrameBody…

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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I just need requirement 5 for the transfer price please.
Solve 2, the first answer is the wrong. Find the lowest acceptable transfer price.
please answet the following question thanks
Do not give solution in image format thanku
The company uses the opportunity cost approach to transfer pricing. What is the minimum transfer price in Case 1?
The Cycle Division of Sheffield Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin (a) Your answer is correct. (b) $330 990 Presently, the Cycle Division buys its body frames from an outside supplier. However Sheffield has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $385 per frame. The variable cost for FrameBody is $291. The Cycle Division is willing to pay $299 to purchase the frames from FrameBody. Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,100 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (2)…
Glide Behind Corporation manufactures and sells small cargo trailers. The Wheel Division creates parts that are both sold externally and transferred internally to the Assembly Division. Variable production costs of wheel set #102 are $80, and each set sells externally for $150. What would you recommend as the internal transfer price from the Wheel Division to the Assembly Division if a competitive external market exists for wheel set #102? Would your answer change if there were no external market this component? Why? What would the transfer price be if upper management required cost plus 25 percent as the transfer price?
Brissett Corporation makes three products that use the current constraint, which is a particular type of machine. Data concerning those products appear below: GK LQ XK Selling price per unit $ 119.51 $ 226.07 $ 228.96 Variable cost per unit $ 89.87 $ 176.86 $ 178.92 Time on the constraint (minutes) 1.90 3.70 3.60 Required: A. Rank the products in order of their current profitability from the most profitable to the least profitable. In other words, rank the products in the order in which they should be emphasized. B. Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?
The Cycle Division of Sheffield Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin (a) $330 990 $2,420 Presently, the Cycle Division buys its body frames from an outside supplier. However Sheffield has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $385 per frame. The variable cost for FrameBody is $291. The Cycle Division is willing to pay $299 to purchase the frames from FrameBody. 1,320 (2) Effect on the income of FrameBody $1,100 Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,100 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or…
Use the following information for the next 2 questions (8 & 9). Division X produces and sells a product to external and internal customers. Per-unit information about its operations include: Selling price per unit to external customers $250 Variable manufacturing costs per unit 115 Fixed manufacturing overhead costs per unit 70 8. If X is operating at capacity and has unlimited external customer demand, what should be the minimum transfer price? 9. If X has sufficient excess capacity to meet internal demand, what should be the minimum transfer price?
Q. 8 Which following costs need to be considered for both make or buy options? O. Fixed overhead O. Variable overhead O. Rental revenue Q. 9 What is the per unit cost to purchase from the vendor? Round to the nearest penny. Q. 10 Based on your analysis, the CreativeStationary Co. should make the product in-house or buy them from the vender? O. Make O. Buy Do (Q8,9,10 plz)
The Cycle Division of Sheffield Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin $330 (a) 990 $2,420 Presently, the Cycle Division buys its body frames from an outside supplier. However Sheffield has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $385 per frame. The variable cost for FrameBody is $291. The Cycle Division is willing to pay $299 to purchase the frames from FrameBody. 1,320 (2) Effect on the income of FrameBody $1,100 Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,100 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or…

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