Ivanhoe Corporation manufactures wireless soundbar speakers. It is a division of Vany TV, which manufactures televisions. Ivanhoe sells the speakers to Vany as well as to retail stores. The following information is available for Ivanhoe's speaker: unit variable cost $54; unit fixed cost $42; and a unit selling price of $126 to outside customers. Vany currently purchases speakers from an outside supplier for $118 each. Top management of Vany would like Ivanhoe to provide 43,000 speakers per year at a transfer price of $54 each. (a) Compute the minimum transfer price that Ivanhoe should accept assumping Ivanhoe is operating at full capacity. (b) Minimum transfer price $ Compute the minimum transfer price that Ivanhoe should accept assumping Ivanhoe has sufficient excess capacity to provide the 43,000 speakers to Vany. Minimum transfer price $
Ivanhoe Corporation manufactures wireless soundbar speakers. It is a division of Vany TV, which manufactures televisions. Ivanhoe sells the speakers to Vany as well as to retail stores. The following information is available for Ivanhoe's speaker: unit variable cost $54; unit fixed cost $42; and a unit selling price of $126 to outside customers. Vany currently purchases speakers from an outside supplier for $118 each. Top management of Vany would like Ivanhoe to provide 43,000 speakers per year at a transfer price of $54 each. (a) Compute the minimum transfer price that Ivanhoe should accept assumping Ivanhoe is operating at full capacity. (b) Minimum transfer price $ Compute the minimum transfer price that Ivanhoe should accept assumping Ivanhoe has sufficient excess capacity to provide the 43,000 speakers to Vany. Minimum transfer price $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ivanhoe Corporation manufactures wireless soundbar speakers. It is a division of Vany TV, which manufactures televisions. Ivanhoe sells the speakers to Vany as well as to retail stores. The
following information is available for Ivanhoe's speaker: unit variable cost $54; unit fixed cost $42; and a unit selling price of $126 to outside customers. Vany currently purchases speakers
from an outside supplier for $118 each. Top management of Vany would like Ivanhoe to provide 43,000 speakers per year at a transfer price of $54 each.
(a)
Compute the minimum transfer price that Ivanhoe should accept assumping Ivanhoe is operating at full capacity.
Minimum transfer price
$
(b)
Compute the minimum transfer price that Ivanhoe should accept assumping Ivanhoe has sufficient excess capacity to provide the 43,000 speakers to Vany.
Minimum transfer price
$
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