The Selling Division’s unit sales price is $37 and its unit variable cost is $15. Its...

The Selling Division’s unit sales price is $37 and its unit variable cost is $15. Its capacity is 11000 units. Fixed costs per unit are $8. Current outside sales are 9000 units.

What is the Selling Division’s opportunity cost per unit from selling 3000 units to the Purchasing Division?

-$0

-$37

-$22

-$14

The Can Division of Marigold Corp. manufactures and sells tin cans externally for $1.00 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.18, respectively. The Packaging Division wants to purchase 50,000 cans at $0.42 a can. Selling internally will save $0.04 a can.

Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?

-$0.20

-$0.38

-$0.24

-$0.42

The Can Division of Sheridan Company manufactures and sells tin cans externally for $0.80 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.12, respectively. The Packaging Division wants to purchase 50,000 cans at $0.36 a can. Selling internally will save $0.07 a can.

Assuming the Can Division is already operating at full capacity, what is the minimum transfer price it should accept?

-$0.79

-$0.44

-$0.73

-$0.43

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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