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?

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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