Current ratio is calculated by dividing the current assets by the current liabilities. It helps the Company to measure its liquidity. Current ratio is a relation between the current assets and current liabilities. To calculate: Current ratio of T and that ratio depicting about the company.

Question

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $10 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is not operating at full capacity and is able to supply the Deodorant Division with its needs for the chemical, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $10.00 per ounce $6.00 per ounce $15.00 per ounce $3.00 per ounce

Answer 1

Question

Chapter 4, Problem 4.9.3AAMCP

To determine

Concept Introduction:

Current ratio is calculated by dividing the current assets by the current liabilities. It helps the Company to measure its liquidity. Current ratio is a relation between the current assets and current liabilities.

To calculate: Current ratio of T and that ratio depicting about the company.

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