Vancouver can sell all 280,000 units of TR222 on the open market at a price of $251 per unit. Kamloops is willing to buy 28,000 of those units. What should the transfer price be? Transfer price $ eTextbook and Media per unit Of the 280,000 units of component TR222 it can produce, Vancouver can sell 196,000 units on the open market at a price of $251 per unit. Kamloops is willing to buy an additional 28,000 units. What should the minimum transfer price be? Minimum transfer price per unit
Vancouver can sell all 280,000 units of TR222 on the open market at a price of $251 per unit. Kamloops is willing to buy 28,000 of those units. What should the transfer price be? Transfer price $ eTextbook and Media per unit Of the 280,000 units of component TR222 it can produce, Vancouver can sell 196,000 units on the open market at a price of $251 per unit. Kamloops is willing to buy an additional 28,000 units. What should the minimum transfer price be? Minimum transfer price per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Of the 280,000 units of component TR222 it can produce, Vancouver can sell 224,000 units on the open market at a price of $251
per unit. Kamloops is willing to buy an additional 84,000 units.
What should the transfer price be? (Round answer to 2 decimal places, e.g. 52.75.)
Transfer price $
eTextbook and Media
per unit
Transcribed Image Text:Sheridan Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its
return on investment. Vancouver has the capacity to manufacture 280,000 units of component TR222. Vancouver's variable costs are
$150 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $90 of variable costs to the component and
sells the final product for $460.
Consider the following independent situations:
Vancouver can sell all 280,000 units of TR222 on the open market at a price of $251 per unit. Kamloops is willing to buy 28,000 of
those units.
What should the transfer price be?
Transfer price
eTextbook and Media
per unit
Of the 280,000 units of component TR222 it can produce, Vancouver can sell 196,000 units on the open market at a price of $251
per unit. Kamloops is willing to buy an additional 28,000 units.
What should the minimum transfer price be?
Minimum transfer price
per unit
S
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