The Mixed Nuts Division of Yummy Snacks, Incorporated had the following operating results last year: Sales...

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The Mixed Nuts Division of Yummy Snacks, Incorporated had the following operating results last year: Sales (140,000 pounds of product) $ 70,000 Variable expenses 42,000 Contribution margin $ 28,000 Fixed expenses Income 12,000 $16,000 Yummy expects identical operating results in the division this year. The Mixed Nuts Division has the ability to produce and sell 200,000 pounds of product annually. Assume that the Trail Mix Division of Yummy wants to purchase an additional 20,000 pounds of nuts from the Mixed Nuts Division. Mixed Nuts will be able to increase its profit by accepting any transfer price above: $0.10 per pound $0.25 per pound. $0.08 per pound. $0.15 per pound $0.30 per pound The Mixed Nuts Division of Yummy Snacks, Incorporated had the following operating results last year: Sales (140,000 pounds of product) $ 70,000 Variable expenses 42,000 Contribution margin $ 28,000 Fixed expenses Income 12,000 $16,000 Yummy expects identical operating results in the division this year. The Mixed Nuts Division has the ability to produce and sell 200,000 pounds of product annually. Assume that the Trail Mix Division of Yummy wants to purchase an additional 20,000 pounds of nuts from the Mixed Nuts Division. Mixed Nuts will be able to increase its profit by accepting any transfer price above: $0.10 per pound $0.25 per pound. $0.08 per pound. $0.15 per pound $0.30 per pound

Answer rating: 100% (QA)

To determine the minimum transfer price per pound that the Mixed Nuts Division should accept to increase its profit we can use the concept of contribu... View the full answer