Sunland Company manufactures and sells high-priced motorcycles. The Engine Division produces and sells to other motorcycle companies and internally to its Production Division. It has been decided that the Engine Division will sell 28000 units to the Production Division ar $1050 a unit. The Engine Division, currently operating at fall capacity, has a selling price of $3250 amd unit variable costs and unit fixed costs of $1050 and $650, respectively. The Production Division is currently paying $3000 per unit to an outside supplier. Of this amount, $110 per unit can be saved on internal sales from reduced selling expenses. What is the minimum transfer price that the Engine Division should accept? - $3140 - S 2200 $3000 $3250

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sunland Company manufactures and sells high-priced motorcycles. The Engine Division produces and
sells to other motorcycle companies and internally to its Production Division. It has been decided that the
Engine Division will sell 28000 units to the Production Division ar $1050 a unit. The Engine Division,
currently operating at fall capacity, has a selling price of $3250 amd unit variable costs and unit fixed
costs of $1050 and $650, respectively. The Production Division is currently paying $3000 per unit to an
outside supplier. Of this amount, $110 per unit can be saved on internal sales from reduced selling
expenses. What is the minimum transfer price that the Engine Division should accept? - $3140 - $
2200 $3000 - $3250
Transcribed Image Text:Sunland Company manufactures and sells high-priced motorcycles. The Engine Division produces and sells to other motorcycle companies and internally to its Production Division. It has been decided that the Engine Division will sell 28000 units to the Production Division ar $1050 a unit. The Engine Division, currently operating at fall capacity, has a selling price of $3250 amd unit variable costs and unit fixed costs of $1050 and $650, respectively. The Production Division is currently paying $3000 per unit to an outside supplier. Of this amount, $110 per unit can be saved on internal sales from reduced selling expenses. What is the minimum transfer price that the Engine Division should accept? - $3140 - $ 2200 $3000 - $3250
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