TS Electronics is a manufacturer with two departments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at $6.25 per chip. The costs associated with the computer chips are as follows: (Click the icon to view the computer chip costs.) The Cell Phone Department has been purchasing the chips that it needs for $4.00 per chip from Chip Universe, but the manager was thinking that if the Chips Department could supply the chips for less than what Chip Universe is asking, then it would arrange a transfer between departments instead of giving the business to an external company. If the Cell Phone Department needs 240,000 computer chips and current production in the Chips Department is 480,000 chips, should a transfer take place? If so, at what price? (Note: For internal transfers, the selling and administrative costs are reduced to $0.45 per unit.) What other qualitative factors might need to be considered? First, let's determine if a transfer should take place. Begin by determining the minimum transfer price. (Round your answer to the nearest cent.) The minimum transfer price is $ 3.70. The internal transfer should take place. The price for the internal transfer should fall between $ and $ Computer chip costs Variable manufacturing costs $ Variable selling and administrative costs. $ Capacity.... Current production Print Done 3.25 1.00 725,000 units 725,000 units
TS Electronics is a manufacturer with two departments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at $6.25 per chip. The costs associated with the computer chips are as follows: (Click the icon to view the computer chip costs.) The Cell Phone Department has been purchasing the chips that it needs for $4.00 per chip from Chip Universe, but the manager was thinking that if the Chips Department could supply the chips for less than what Chip Universe is asking, then it would arrange a transfer between departments instead of giving the business to an external company. If the Cell Phone Department needs 240,000 computer chips and current production in the Chips Department is 480,000 chips, should a transfer take place? If so, at what price? (Note: For internal transfers, the selling and administrative costs are reduced to $0.45 per unit.) What other qualitative factors might need to be considered? First, let's determine if a transfer should take place. Begin by determining the minimum transfer price. (Round your answer to the nearest cent.) The minimum transfer price is $ 3.70. The internal transfer should take place. The price for the internal transfer should fall between $ and $ Computer chip costs Variable manufacturing costs $ Variable selling and administrative costs. $ Capacity.... Current production Print Done 3.25 1.00 725,000 units 725,000 units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:TS Electronics is a manufacturer with two departments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at $6.25 per chip. The costs associated with the computer chips are as follows:
(Click the icon to view the computer chip costs.)
The Cell Phone Department has been purchasing the chips that it needs for $4.00 per chip from Chip Universe, but the manager was thinking that if the Chips Department could supply the chips for less than what Chip Universe is asking, then it would arrange a transfer between departments instead of giving the business to an
external company.
If the Cell Phone Department needs 240,000 computer chips and current production in the Chips Department is 480,000 chips, should a transfer take place? If so, at what price? (Note: For internal transfers, the selling and administrative costs are reduced to $0.45 per unit.) What other qualitative factors might need to be
considered?
First, let's determine if a transfer should take place. Begin by determining the minimum transfer price. (Round your answer to the nearest cent.)
The minimum transfer price is $ 3.70.
The internal transfer should take place.
The price for the internal transfer should fall between $
and $.
(...)))
Computer chip costs
$
Variable manufacturing costs ........
Variable selling and administrative costs $
Capacity.....
Current production
……………….…………….
Print
Done
3,25
1.00
725,000 units
725,000 units
X
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