Given the conditions cited above, what is the maximum price per wheel that Vega should be willing to pay Lou if a transfer price were to take place? A. P28B. P30C. P42D. P45 Lou and Vega are the only two divisions in LV Company.Lou makes and sells motors which can either be sold to outside customers or sold to Vega.The following data are availableLouVegaSelling Price per motor to outside customersVariable Costs per motor when sold to outside customersCapacity in motorsmotors sold to outside customersP45P3012,0006,000Number of motors needed/monthPrice per motor paid to an outside supplierIf Lou sells the motors to Vega, Lou can avoid P2 per motor in sales commisions4,000P42

When products or services are traded within departments of the same business, transfer price…

Answered: Lou and Vega are the only two divisions…

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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Answer 4,5,6
part 2 If Oriole World could avoid all variable SG&A costs on this order, what would be the minimum selling price for the special order?
Please solve accurately. Thank you
When negotlating a transfer price, whlch prlce Is most acceptable to the selling divislon if they are operating with Idle capacity? Multiple Choicel the price must cover at least the variable manufacturing costs of the selling division the price must be less than the variable manufacturing costs of the selling division the price must cover at least the variable manufacturing costs of the buying division the price must cover at least the selling price to outside customers
d. What would happen to the break-even point if the selling price was raised to $33 butvariable costs rose to $24 a unit?
The following question is based on the demand and cost data for a pure monopolist given in the table below. Output Price Total Cost 0 $500 $250 12345 300 260 250 290 200 350 150 500 100 680 Refer to the above table. If the monopolist were forced to produce the socially optimal output through the imposition of a ceiling price, the ceiling price would have to be set at: O $100 $150 O $200 $250 www.yout House of High Ant SWEPT his OVER HIM
Q1) One of the industrial investors needed an analysis that would lead him to a break-even level between the following inputs and outputs: Fixed Cost = 180079 $ , Variable Costs =475, Revenue of saling prices per unit (204 $ ) Y of Products 890 ‘599‘ 917‘ eu‘ 955[ 975‘ sas[ 1,u7‘ 1,159' 1,193‘ 1,209‘ 1,255‘ Require A) Find all lines of anlysis . B) How the produaction reach to B.E.P. C) Based on the available information, show the level of variation from line of production to other annually.
1. Consider a pure exchange economy with two goods and two consumers. Let F denote food and C denote clothing. Lacy has the utility function U(F, C) = F 1/3 C 2/3 . Roy has the utility function V (F, C) = F 2/3 C 1/3 . Each consumer has an initial endowment consisting of 9 units of F and 9 units of C. Normalize the price of F to one. Let P denote the price of C. (a) Is the initial endowment a Pareto efcient allocation of F and C between the two con sumers? Explain briefy. (b) What is each consumer’s demand for F and C as a function of P? [Hint: the wealth of each consumer is 9 + 9P.] (c) What is the price of C in a competitive equilibrium? (d) What is the allocation of F and C between the two consumers in a competitive equilibrium?
The 4 mutually exclusive alternatives shown below are compared by the incremental B/C method. What alternative, if any, should be selected?
Using the formula in the text, if the lowest acceptable transfer price from the viewpoint of the selling division is $95 and the opportunity cost per unit on outside sales is $38, then the variable cost per unit must be:
QUESTIONS Consider the following payoff Table The State of Nature Decision Alternative 0.82 1-0.82- 51 $₂ D1 5 8 0₂ 5 9 D₂ 14 4 What is the payoff value for the D2 under $2 should be to keep the optimal solution always optimal? Do not writ the sign > or <) (Round your answer to 2 decimal places)
Hh.

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