Spice Company has two divisions, Parsley and Sage. Parsley produces a unit that Sage could use in its production. Sage currently is purchasing 50,200 units from an outside supplier for $52. Parsley is operating at less than full capacity and has variable costs of $29 per unit. The full cost to manufacture the unit is $40. Parsley currently sells 450,200 units at a selling price of $56. If an internal transfer is made, variable shipping and administrative costs of $1.00 per unit could be avoided. What would be the maximum transfer price? Multiple Choice ● ● ● $29 $40.00 $52.00 $28.00

Spice Company has two divisions, Parsley and Sage. Parsley produces a unit that Sage could use in its production. Sage currently is purchasing 50,200 units from an outside supplier for $52. Parsley is operating at less than full capacity and has variable costs of $29 per unit. The full cost to manufacture the unit is $40. Parsley currently sells 450,200 units at a selling price of $56. If an internal transfer is made, variable shipping and administrative costs of $1.00 per unit could be avoided. What would be the maximum transfer price? Multiple Choice ● ● ● $29 $40.00 $52.00 $28.00

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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