The Can Division of Marigold Corp. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.06, respectively. The Packaging Division wants to purchase 50,000 cans at $0.30 a can. Selling internally will save $0.03 a can. Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept? $0.30 $0.21 $0.27 $0.24
The Can Division of Marigold Corp. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.06, respectively. The Packaging Division wants to purchase 50,000 cans at $0.30 a can. Selling internally will save $0.03 a can. Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept? $0.30 $0.21 $0.27 $0.24
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Can Division of Marigold Corp. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.06, respectively. The Packaging Division wants to purchase 50,000 cans at $0.30 a can. Selling internally will save $0.03 a can.
Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?
Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?
$0.30
$0.21
$0.27
$0.24
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