Variable cost per unit $52 Fixed cost per unit (based on capacity) $17 The Safety Products Division of Brull Products, Inc needs 6,000 special heavy- duty sensors per year. The Sensor Division's variable cost to manufacture and ship this special sensor would be $60 per unit. Because these special sensors require more manufacturing resources than the standard sensor, the Sensor Division would have to reduce its production and sales of standard sensors to outside customers from 56,000 units per year to 46,400 units per year. From the standpoint of the Sensor Division, what is the minimal acceptable transfer price for the special sensors for the Safety Products Division? Multiple Choice $75.00 per unit $77.00 per unit $83.00 per unit $96.80 per unit
Variable cost per unit $52 Fixed cost per unit (based on capacity) $17 The Safety Products Division of Brull Products, Inc needs 6,000 special heavy- duty sensors per year. The Sensor Division's variable cost to manufacture and ship this special sensor would be $60 per unit. Because these special sensors require more manufacturing resources than the standard sensor, the Sensor Division would have to reduce its production and sales of standard sensors to outside customers from 56,000 units per year to 46,400 units per year. From the standpoint of the Sensor Division, what is the minimal acceptable transfer price for the special sensors for the Safety Products Division? Multiple Choice $75.00 per unit $77.00 per unit $83.00 per unit $96.80 per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Brull Products, Inc., has a Sensor Division
that manufactures and sells a number of
products, including a standard sensor. Data
concerning that sensor appear below:
Capacity in units 56,000
Selling price to outside customers $75
Variable cost per unit $52
Fixed cost per unit (based on capacity) $17
The Safety Products Division of Brull
Products, Inc needs 6,000 special heavy-
duty sensors per year. The Sensor Division's
variable cost to manufacture and ship this
special sensor would be $60 per unit.
Because these special sensors require
more manufacturing resources than the
standard sensor, the Sensor Division would
have to reduce its production and sales of
standard sensors to outside customers
from 56,000 units per year to 46,400 units
per year. From the standpoint of the Sensor
Division, what is the minimal acceptable
transfer price for the special sensors for the
Safety Products Division?
Multiple Choice $75.00 per unit
$77.00 per unit
$83.00 per unit
$96.80 per unit
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