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USE THE FOLLOWING INFORMATION FOR QUESTIONS 26 & 27 The Soccer Investment Center of Nike manufactures and sells soccer hats and soccer balls. The Soccer Hats Profit Center incurs the following costs for the production of a single soccer hat when 10,000 soccer hats are produced each year. Direct materials Direct labor Variable overhead Fixed overhead Variable selling $2.75 1.50 .75 1.00 3.50 $9.50 The Soccer Hats Profit Center sells the soccer hats to retail stores for $12.50. The Soccer Balls Profit Center is doing a promotion whereby each customer that purchases a soccer ball during the World Cup receives a free soccer hat. The Soccer Balls Profit Center would like to purchase these soccer hats from the Soccer Hats Profit Center. 27. Total Cost 26. Assume that the Soccer Hats Profit Center has idle capacity. If they sell to the Soccer Balls Profit Center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00 Assume that the apparel profit center is at full capacity. If they sell to the sports equipment profit center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? HINT: in the computation of opportunity cost, don't forget the variable selling costs that retail stores are charged. A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00

USE THE FOLLOWING INFORMATION FOR QUESTIONS 26 & 27 The Soccer Investment Center of Nike manufactures and sells soccer hats and soccer balls. The Soccer Hats Profit Center incurs the following costs for the production of a single soccer hat when 10,000 soccer hats are produced each year. Direct materials Direct labor Variable overhead Fixed overhead Variable selling $2.75 1.50 .75 1.00 3.50 $9.50 The Soccer Hats Profit Center sells the soccer hats to retail stores for $12.50. The Soccer Balls Profit Center is doing a promotion whereby each customer that purchases a soccer ball during the World Cup receives a free soccer hat. The Soccer Balls Profit Center would like to purchase these soccer hats from the Soccer Hats Profit Center. 27. Total Cost 26. Assume that the Soccer Hats Profit Center has idle capacity. If they sell to the Soccer Balls Profit Center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00 Assume that the apparel profit center is at full capacity. If they sell to the sports equipment profit center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? HINT: in the computation of opportunity cost, don't forget the variable selling costs that retail stores are charged. A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 29E: Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima....
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The Soccer Investment Center of Nike manufactures and sells soccer hats and soccer balls. The Soccer Hats Profit Center incurs the following costs for the production of a single soccer hat when 10,000 soccer hats are produced each year: USE THE FOLLOWING INFORMATION FOR QUESTIONS 26 & 27 Direct materials Direct labor Variable overhead Fixed overhead Variable selling 26. $9.50 The Soccer Hats Profit Center sells the soccer hats to retail stores for $12.50. The Soccer Balls Profit Center is doing a promotion whereby each customer that purchases a soccer ball during the World Cup receives a free soccer hat. The Soccer Balls Profit Center would like to purchase these soccer hats from the Soccer Hats Profit Center. 27. Total Cost $2.75 1.50 .75 1.00 3.50 Assume that the Soccer Hats Profit Center has idle capacity. If they sell to the Soccer Balls Profit Center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00 Assume that the apparel profit center is at full capacity. If they sell to the sports equipment profit center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? HINT: in the computation of opportunity cost, don't forget the variable selling costs that retail stores are charged. A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00
Transcribed Image Text:The Soccer Investment Center of Nike manufactures and sells soccer hats and soccer balls. The Soccer Hats Profit Center incurs the following costs for the production of a single soccer hat when 10,000 soccer hats are produced each year: USE THE FOLLOWING INFORMATION FOR QUESTIONS 26 & 27 Direct materials Direct labor Variable overhead Fixed overhead Variable selling 26. $9.50 The Soccer Hats Profit Center sells the soccer hats to retail stores for $12.50. The Soccer Balls Profit Center is doing a promotion whereby each customer that purchases a soccer ball during the World Cup receives a free soccer hat. The Soccer Balls Profit Center would like to purchase these soccer hats from the Soccer Hats Profit Center. 27. Total Cost $2.75 1.50 .75 1.00 3.50 Assume that the Soccer Hats Profit Center has idle capacity. If they sell to the Soccer Balls Profit Center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00 Assume that the apparel profit center is at full capacity. If they sell to the sports equipment profit center, the MINIMUM transfer price that should be charged if variable selling costs would NOT be incurred on an internal transfer is? HINT: in the computation of opportunity cost, don't forget the variable selling costs that retail stores are charged. A. $9.00 B. 6.00 C. 7.50 D. 5.00 E. 4.00
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