Omega Division makes and sells a single product. Presently it sells 12,000 units per year to outside customers at P24 per unit. The annual capacity is 20,000 units and the variable cost to make each unit is P16. All selling expenses are fixed. Alpha Division would like to buy 10,000 units a year from Omega Division. The unit price that Omega Division should charge Alpha Division, according to the transfer pricing formula, is
Omega Division makes and sells a single product. Presently it sells 12,000 units per year to outside customers at P24 per unit. The annual capacity is 20,000 units and the variable cost to make each unit is P16. All selling expenses are fixed. Alpha Division would like to buy 10,000 units a year from Omega Division. The unit price that Omega Division should charge Alpha Division, according to the transfer pricing formula, is
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 6PA: Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit...
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Omega Division makes and sells a single product. Presently it sells 12,000 units per year to outside customers at P24 per unit. The annual capacity is 20,000 units and the variable cost to make each unit is P16. All selling expenses are fixed. Alpha Division would like to buy 10,000 units a year from Omega Division. The unit price that Omega Division should charge Alpha Division, according to the transfer pricing formula, is
P26.00
P17.60
P24.10
P14.40
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