Required: Assume each part is independent, unless otherwise indicated. 1. Assume that all of the dishwashers produced can be sold to external customers for $330 each. The Manufactured Housing Division wants to buy 4,830 dishwashers per year. What should the transfer price be? per unit 2. Refer to Requirement 1. Assume $26 of avoidable distribution costs. Identify the maximum and minimum transfer prices. Maximum per unit Minimum %24 per unit Identify the actual transfer price, assuming that negotiation splits the difference. %2$ per unit 3. Assume that the Appliance Division is operating at 75 percent capacity. The Manufactured Housing Division is currently buying 4,830 dishwashers from an outside supplier for $298 each. Assume that any joint benefit will be split evenly between the two divisions. What is the expected transfer price? 24 per unit How much will the profits of the Appliance Division increase, assuming that it sells the extra 4,830 dishwashers internally? %24 How much will the profits of the firm increase under this arrangement?

Required: Assume each part is independent, unless otherwise indicated. 1. Assume that all of the dishwashers produced can be sold to external customers for $330 each. The Manufactured Housing Division wants to buy 4,830 dishwashers per year. What should the transfer price be? per unit 2. Refer to Requirement 1. Assume $26 of avoidable distribution costs. Identify the maximum and minimum transfer prices. Maximum per unit Minimum %24 per unit Identify the actual transfer price, assuming that negotiation splits the difference. %2$ per unit 3. Assume that the Appliance Division is operating at 75 percent capacity. The Manufactured Housing Division is currently buying 4,830 dishwashers from an outside supplier for $298 each. Assume that any joint benefit will be split evenly between the two divisions. What is the expected transfer price? 24 per unit How much will the profits of the Appliance Division increase, assuming that it sells the extra 4,830 dishwashers internally? %24 How much will the profits of the firm increase under this arrangement?

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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