Vancouver can sell all 300,000 units of TR222 on the open market at a price of $255 per unit. Kamloops is willing to buy 30,000 of those units. What should the transfer price be? Transfer price $ eTextbook and Media Of the 300,000 units of component TR222 it can produce, Vancouver can sell 210,000 units on the open market at a price of $255 per unit. Kamloops is willing to buy an additional 30,000 units. What should the minimum transfer price be? per unit Minimum transfer price $ per unit
Vancouver can sell all 300,000 units of TR222 on the open market at a price of $255 per unit. Kamloops is willing to buy 30,000 of those units. What should the transfer price be? Transfer price $ eTextbook and Media Of the 300,000 units of component TR222 it can produce, Vancouver can sell 210,000 units on the open market at a price of $255 per unit. Kamloops is willing to buy an additional 30,000 units. What should the minimum transfer price be? per unit Minimum transfer price $ per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Carla Vista 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 300,000 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 $450.
Consider the following independent situations:
Vancouver can sell all 300,000 units of TR222 on the open market at a price of $255 per unit. Kamloops is willing to buy 30,000 of
those units.
What should the transfer price be?
Transfer price $
eTextbook and Media
Of the 300,000 units of component TR222 it can produce, Vancouver can sell 210,000 units on the open market at a price of $255
per unit. Kamloops is willing to buy an additional 30,000 units.
What should the minimum transfer price be?
per unit
Minimum transfer price $
per unit
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