Use the information for Desks Unlimited above with the following changes: 1. The Computer Desk Division is able to sell at full capacity (15,000 units). 2. If there is a transfer between the divisions, the Computer Desk Division will save $50 per unit in Variable Marketing and Shipping costs. Answer the following questions. Show your work and clearly label your answers. a. What is the appropriate Transfer Price range? b. If a transfer is made for $460 per desk, how much better of worse off is the firm?
Use the information for Desks Unlimited above with the following changes: 1. The Computer Desk Division is able to sell at full capacity (15,000 units). 2. If there is a transfer between the divisions, the Computer Desk Division will save $50 per unit in Variable Marketing and Shipping costs. Answer the following questions. Show your work and clearly label your answers. a. What is the appropriate Transfer Price range? b. If a transfer is made for $460 per desk, how much better of worse off is the firm?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use the information for Desks Unlimited above with the following changes:
1. The Computer Desk Division is able to sell at full capacity (15,000 units).
2. If there is a transfer between the divisions, the Computer Desk Division will save $50 per unit in Variable Marketing and Shipping costs.
Answer the following questions. Show your work and clearly label your answers.
a. What is the appropriate Transfer Price range?
b. If a transfer is made for $460 per desk, how much better of worse off is the firm?
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