Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 2. information of department a is as follows selli

2. Information of department A is as follows Selling price Fixed cost Production units and...

70.2K

Verified Solution

Question

Finance

image

2. Information of department A is as follows Selling price Fixed cost Production units and sold to external market 40,000 units Marginal cost = Variable cost $65 per unit $120 per unit $720,000 per year Department B requires components from department A 10,000 units per year. Department B purchases components from the market at $105 per unit. Case 1 Department A has available capacity and the demand from outsider is not higher than the current demand 1.1 if Department A produces for Department B, what is the transfer cost per unit. 1.2 If Department B purchases from Department A, what profit or loss for the company should be. Case 2 Department A currently uses the full capacity 2.1 what the transfer price of department A to be charged for department B? 2.2 if Department A produces and transfer to Department B at $105 per unit, what is the profit or loss of the company. Case 3 Department A has the maximum capacity at 45,000 units per year and the demand from outsider is not higher than the current demand. If Department A produces and transfers to Department B 10,000 units

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students