The Raisin Division of Trail Mix Foods, Incorporated had the following operating results last year: Sales (150,000 pounds of raisins) $ 60,000 Variable expenses 37,500 Contribution margin 22,500 Fixed expenses 12,000 Profit $ 10,500 Raisin expects identical operating results this year. The Raisin Division has the ability to produce and sell 200,000 pounds of raisins annually. Assume that the Peanut Division of Trail Mix Foods wants to purchase an additional 20,000 pounds of raisins from the Raisin Division. Raisin will be able to increase its profit by accepting any transfer price above:
The Raisin Division of Trail Mix Foods, Incorporated had the following operating results last year: Sales (150,000 pounds of raisins) $ 60,000 Variable expenses 37,500 Contribution margin 22,500 Fixed expenses 12,000 Profit $ 10,500 Raisin expects identical operating results this year. The Raisin Division has the ability to produce and sell 200,000 pounds of raisins annually. Assume that the Peanut Division of Trail Mix Foods wants to purchase an additional 20,000 pounds of raisins from the Raisin Division. Raisin will be able to increase its profit by accepting any transfer price above:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Raisin Division of Trail Mix Foods, Incorporated had the following operating results last year:
| Sales (150,000 pounds of raisins) | $ | 60,000 | |
| Variable expenses | 37,500 | ||
| Contribution margin | 22,500 | ||
| Fixed expenses | 12,000 | ||
| Profit | $ | 10,500 | |
Raisin expects identical operating results this year. The Raisin Division has the ability to produce and sell 200,000 pounds of raisins annually.
Assume that the Peanut Division of Trail Mix Foods wants to purchase an additional 20,000 pounds of raisins from the Raisin Division. Raisin will be able to increase its profit by accepting any transfer price above:
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