Edwards Company's Division X materials are currently purchased from an outside supplier at $60 per...
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Edwards Company's Division X materials are currently purchased from an outside supplier at $60 per unit. Division W is able to supply Division X with 20,000 units at a variable cost of $46 per unit. The two divisions have recently negotiated a transfer price of $50 per unit for the 20,000 units. (A) By how much will each division's income increase as a result of this transfer? (B) What is the total increase in income for Edwards? Show your calculations to get credit. . . Division X of Tree Inc.'s has sales of $600,000, income from operations of $100,000 and assets of $450,000. The minimum acceptable rate of return on assets is 14%. What is the residual income for the division? Must show your calculations to get any credit
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