Management of the Crane Company would like the Food Division to transfer 11000 cans of its final product to the Restaurant Division for $40. The Food Division sells the product to customers for $80 per unit. The Food Division’s variable cost per unit is $43 and its fixed cost per unit is $9. If the Food Division has 11000 units available capacity, what is the minimum transfer price the Food Division should accept?
Management of the Crane Company would like the Food Division to transfer 11000 cans of its final product to the Restaurant Division for $40. The Food Division sells the product to customers for $80 per unit. The Food Division’s variable cost per unit is $43 and its fixed cost per unit is $9. If the Food Division has 11000 units available capacity, what is the minimum transfer price the Food Division should accept?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Management of the Crane Company would like the Food Division to transfer 11000 cans of its final product to the Restaurant Division for $40. The Food Division sells the product to customers for $80 per unit. The Food Division’s variable cost per unit is $43 and its fixed cost per unit is $9.
If the Food Division has 11000 units available capacity, what is the minimum transfer price the Food Division should accept?
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