COST ACCT-W/ACCESS >C< NON-MAJORS
COST ACCT-W/ACCESS >C< NON-MAJORS
15th Edition
ISBN: 9781269768191
Author: Horngren
Publisher: PEARSON C
Question
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Chapter 22, Problem 22.34P

1.

To determine

The transfer price per roll of recycled paper and would the production manager will choose to purchase 2,000 pounds next month from EC.

Given information:

The rate of the recycling division is $0.075.

Numbers of the recyclable paper used is 100 pounds.

Variable cost is $6.35.

Fixed cost is $2.15.

The recycling paper is transferred to the manufacturing division at the cost of 110%.

2.

To determine

Whether the external purchase is in the best interest of CM and the cause for this goal incongruence.

Given information:

The rate of the recycling division is $0.075.

Numbers of the recyclable paper used is 100 pounds.

Variable cost is $6.35.

Fixed cost is $2.15.

3.

To determine

The reason of the sudden price cut, comment on the validity of the $17 per roll market price and the ethics of the manufacturing manager and whether the change in transfer price to $17 matter to SC.

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