ne Hinges Division of Altoona Corporation sells 118,000 units of part Z-25 to the outside market. Part Z-25 sells for $116 and has a variable cost per unit of $60 fixed cost per unit of $10. The Hinges Division has a capacity to produce 195,000 units per period. The Door Division currently purchases 48,000 units of part 2 5 from the Hinges Division for $78. The Door Division has been approached by an outside supplier willing to supply the parts for $74. If Altoona uses a negotia ansfer pricing system, what is the minimum transfer price that should be charged for this transaction?
ne Hinges Division of Altoona Corporation sells 118,000 units of part Z-25 to the outside market. Part Z-25 sells for $116 and has a variable cost per unit of $60 fixed cost per unit of $10. The Hinges Division has a capacity to produce 195,000 units per period. The Door Division currently purchases 48,000 units of part 2 5 from the Hinges Division for $78. The Door Division has been approached by an outside supplier willing to supply the parts for $74. If Altoona uses a negotia ansfer pricing system, what is the minimum transfer price that should be charged for this transaction?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![TB MC Qu. 15-89 (Algo) The Hinges Division of Altoona...
The Hinges Division of Altoona Corporation sells 118,000 units of part Z-25 to the outside market. Part Z-25 sells for $116 and has a variable cost per unit of $60 and
a fixed cost per unit of $10. The Hinges Division has a capacity to produce 195,000 units per period. The Door Division currently purchases 48,000 units of part Z-
25 from the Hinges Division for $78. The Door Division has been approached by an outside supplier willing to supply the parts for $74. If Altoona uses a negotiated
transfer pricing system, what is the minimum transfer price that should be charged for this transaction?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F846731f5-07d9-436a-9c82-4241ea515dde%2F3945d628-a286-4cd8-bfb9-ddb45085c3b8%2Fqa02w5i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:TB MC Qu. 15-89 (Algo) The Hinges Division of Altoona...
The Hinges Division of Altoona Corporation sells 118,000 units of part Z-25 to the outside market. Part Z-25 sells for $116 and has a variable cost per unit of $60 and
a fixed cost per unit of $10. The Hinges Division has a capacity to produce 195,000 units per period. The Door Division currently purchases 48,000 units of part Z-
25 from the Hinges Division for $78. The Door Division has been approached by an outside supplier willing to supply the parts for $74. If Altoona uses a negotiated
transfer pricing system, what is the minimum transfer price that should be charged for this transaction?
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