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
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Aşsume 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)
Variable cost per unit
Fixed costs per unit (based on capacity)
Capacity in units
59
45
20,000
Division B could use Division A's product os o component part in the manufocture of 4,000 units of its own newly-designed product. Division B has received a quote of $58 from on outside supplier for a component part that is comperable to the one thet Division A makes.
If the compony's divisional managers ore eveluated based their division's profits ond Division A is currently selling 18,000 units on the outside morket, whot is the range of occeptable transfer prices between the two divisions?
Multiple Cholce
$57.00 Transter prices $59.00
$52.00 S Transfer price s $58.00o
$52.00 Transfer price $61.0o
$5700 Transfer price & $61.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F63aaa5f2-4cf6-408d-9874-20b104dcb6cb%2F46da0a3e-b40f-4497-be22-85eb9a0ffa28%2Fggm0izd_processed.jpeg&w=3840&q=75)
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