NSTSYN867 Company has a Components Division which produces parts for product divisions within the company as well as for outside manufacturers. The company's Business Products Division has asked the Components Division to provide it with a new part, A15. Production data related to A15 are as follows: Units needed by Business Products Division Variable production cost Allocated fixed production cost 20,000 units $31 per unit $3.50 per unit Unfortunately, producing the new part requires the same production team within the Components Division that manufactures another part, X32, for outside customers. Data related to the production and sale of X32 to outside customers are below: Units currently produced & sold Selling price Variable production cost Variable selling cost Allocated fixed production cost 100,000 units $70.00 per unit $52.00 per unit $8.00 per unit $2.00 per unit O. If the NSTSYN867's Components Division must reduce the production of X32 by 18% in order to produce all of the part A15 requested by the Business Products Division, what would be the minimum transfer price they should be willing to accept assuming there would be no impact to their fixed cost? A. $[ per unit
NSTSYN867 Company has a Components Division which produces parts for product divisions within the company as well as for outside manufacturers. The company's Business Products Division has asked the Components Division to provide it with a new part, A15. Production data related to A15 are as follows: Units needed by Business Products Division Variable production cost Allocated fixed production cost 20,000 units $31 per unit $3.50 per unit Unfortunately, producing the new part requires the same production team within the Components Division that manufactures another part, X32, for outside customers. Data related to the production and sale of X32 to outside customers are below: Units currently produced & sold Selling price Variable production cost Variable selling cost Allocated fixed production cost 100,000 units $70.00 per unit $52.00 per unit $8.00 per unit $2.00 per unit O. If the NSTSYN867's Components Division must reduce the production of X32 by 18% in order to produce all of the part A15 requested by the Business Products Division, what would be the minimum transfer price they should be willing to accept assuming there would be no impact to their fixed cost? A. $[ per unit
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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