Sered Assume a company has two divisions, Division A and Division B. Division A has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on the outside market) Variable cost per unit Fixed costs per unit (based on capacity) Capacity in units 59 45 4 20,000 Division B could use Division A's product as a component part in the monufacture of 4,000 units of its own newly-designed product. Division B has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division A makes. If the company's divisional managers are evaluated based their division's profits and Division A is currently selling 18,000 units on the outside market, what is the range of acceptable transfer prices between the two divisions? Multiple Cholce $57.00 S Transfer price s $59.00 $52.00 S Transfer price s $58.00 $52.00 S Transfer price s $61.00 $57.00 S Transfer price s $61.00

Sered Assume a company has two divisions, Division A and Division B. Division A has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on the outside market) Variable cost per unit Fixed costs per unit (based on capacity) Capacity in units 59 45 4 20,000 Division B could use Division A's product as a component part in the monufacture of 4,000 units of its own newly-designed product. Division B has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division A makes. If the company's divisional managers are evaluated based their division's profits and Division A is currently selling 18,000 units on the outside market, what is the range of acceptable transfer prices between the two divisions? Multiple Cholce $57.00 S Transfer price s $59.00 $52.00 S Transfer price s $58.00 $52.00 S Transfer price s $61.00 $57.00 S Transfer price s $61.00

Name: SavedAşsume a company hos two divisions, Division A and Division B. D
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Description: SavedAşsume a company hos two divisions, Division A and Division B. Division A hos provided the following information regording the one product that it manufactures and sells on the outside market:Selling price per unit (on the outside market)Variab

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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We Make Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision for several of the parts that it currently produces. Cost information for one such machine part is given below: Variable cost/unit Fixed manufacturing costs (total) Allocated corporate overhead Unit product cost (based on 500 units) 24 4,020.00 6,040.00 36.50 $ 56.62 Fifty percent of the fixed manufacturing costs are directly traceable to this specific machine part and therefore avoidable. An outside supplier will sell the part at a price of $56 per unit if 500 units are purchased. Required: Prepare an analysis whether We Make should continue to manufacture this machine part or whether it should purchase it from the outside supplier (Negative amounts should be indicated by a minus sign. Round "Per Unit" to 2 decimal places.) 500 Units Per Unit Make Buy Difference Purchase Variable cost Fixed manufacturing overhead Common costs Total costs
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