The total advantage (disadvantage) to Equipment Division's profit if it decided to buy from outside supplier instead of accepting Part Division's transfer price is * Sample format: 11,111 or (11,111) NUBD Co. has two divisions, Parts Division (PD and Equipment Division (ED). Each division manager has full responsibility on all decisions regarding sales to internal and external customers. ED has always acquired a certain part from PD at negotiated price of P38 per unit. Due to peso devaluation, PD informed ED that it has increased its transfer price to P45. The new market price is P50 per unit. An outside supplier offered to sell ED the same part at P40 per unit and the management of ED is considering accepting the offer. The Parts division provided the following data: Equipment division's parts requirements 5,000 units Parts division's variable cost per unit Parts division's fixed cost per unit Р35 P10
The total advantage (disadvantage) to Equipment Division's profit if it decided to buy from outside supplier instead of accepting Part Division's transfer price is * Sample format: 11,111 or (11,111) NUBD Co. has two divisions, Parts Division (PD and Equipment Division (ED). Each division manager has full responsibility on all decisions regarding sales to internal and external customers. ED has always acquired a certain part from PD at negotiated price of P38 per unit. Due to peso devaluation, PD informed ED that it has increased its transfer price to P45. The new market price is P50 per unit. An outside supplier offered to sell ED the same part at P40 per unit and the management of ED is considering accepting the offer. The Parts division provided the following data: Equipment division's parts requirements 5,000 units Parts division's variable cost per unit Parts division's fixed cost per unit Р35 P10
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
27
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education