Sunland is a textbook publishing company that has contracts with a number of different authors. It also operates a printing operationcalled Carla Vista. Both companies operate as separate profit centers. Carla Vista prints textbooks written by Sunland authors as wellas books written by non-Sunland authors. The printing operation bills out at $0.08 per page and a typical textbook requires 564 pagesof print. A developmental editor from Sunland approached the printing operation manager offering to pay $0.045 per page for 4,700copies of a 564-page textbook. Outside printers are currently charging $0.05 per page. Carla Vista's variable cost per page is $0.04.(a1)Calculate the appropriate transfer price if Carla Vista has available capacity. (Round answer to 2 decimal places, e.g. 52.75.)Transfer price $Your answer is correct.Indicate whether the printing should be done internally by Carla Vista for the above situation.(a2)Yes(b)eTextbook and MediaYour answer is correct.Calculate the appropriate transfer price if Carla Vista has no available capacity and would have to cancel an outside customer'sjob to accept the editor's offer. (Round answer to 2 decimal places, e.g. 52.75.)Transfer price $NoIndicate whether the printing should be done internally by Carla Vista for the above situation.eTextbook and MediaCarla Vista would0.04Sunland wouldeTextbook and MediaCalculate the change in contribution margin for each company, if top management forces Carla Vista to accept the $0.045transfer price when it has no available capacity.$0.08$Attempts: 1 of 5 usedAttempts: 1 of 5 used

Transfer price is the price at which the goods or services are transferred between two different…

Sunland is a textbook publishing company that has contracts with a number of different authors. It also operates a printing operation called Carla Vista. Both companies operate as separate profit centers. Carla Vista prints textbooks written by Sunland authors as well as books written by non-Sunland authors. The printing operation bills out at $0.08 per page and a typical textbook requires 564 pages of print. A developmental editor from Sunland approached the printing operation manager offering to pay $0.045 per page for 4,700 copies of a 564-page textbook. Outside printers are currently charging $0.05 per page. Carla Vista's variable cost per page is $0.04.

Sunland is a textbook publishing company that has contracts with a number of different authors. It also operates a printing operation called Carla Vista. Both companies operate as separate profit centers. Carla Vista prints textbooks written by Sunland authors as well as books written by non-Sunland authors. The printing operation bills out at $0.08 per page and a typical textbook requires 564 pages of print. A developmental editor from Sunland approached the printing operation manager offering to pay $0.045 per page for 4,700 copies of a 564-page textbook. Outside printers are currently charging $0.05 per page. Carla Vista's variable cost per page is $0.04.

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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