Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $402 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $334 per unit Assume that a transfer price of $382 has been established and that 23,900 units of materials are transferred, with no reduction in the Components Division's current How much would Ziegler Inc.'s total operating income increase? How much would the Instrument Division's operating income increase? How much would the Components Division's operating income increase? d. Any transfer price will cause the total income of the company to incrRASE materiais for products that are ultimately sold to the outside as long as the suppler division capacity is jeted ✓toward making
Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $402 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $334 per unit Assume that a transfer price of $382 has been established and that 23,900 units of materials are transferred, with no reduction in the Components Division's current How much would Ziegler Inc.'s total operating income increase? How much would the Instrument Division's operating income increase? How much would the Components Division's operating income increase? d. Any transfer price will cause the total income of the company to incrRASE materiais for products that are ultimately sold to the outside as long as the suppler division capacity is jeted ✓toward making
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...
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