Management of the Cullumber Company would like the Food Division to transfer 10600 cans of its final product to the Restaurant Division for $70. The Food Division sells the product to customers for $210 per unit. The Food Division’s variable cost per unit is $50 and its fixed cost per unit is $20. The Food Division is currently operating at full capacity. What is the minimum transfer price the Food Division should accept? $50 $70 $20 $210
Management of the Cullumber Company would like the Food Division to transfer 10600 cans of its final product to the Restaurant Division for $70. The Food Division sells the product to customers for $210 per unit. The Food Division’s variable cost per unit is $50 and its fixed cost per unit is $20. The Food Division is currently operating at full capacity. What is the minimum transfer price the Food Division should accept? $50 $70 $20 $210
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Management of the Cullumber Company would like the Food Division to transfer 10600 cans of its final product to the Restaurant Division for $70. The Food Division sells the product to customers for $210 per unit. The Food Division’s variable cost per unit is $50 and its fixed cost per unit is $20. The Food Division is currently operating at full capacity. What is the minimum transfer price the Food Division should accept?
$50
$70
$20
$210
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