Based on Retina Manufacturings data in Exercise 14-20, assume that a transfer price of $72 has been
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Based on Retina Manufacturing’s data in Exercise 14-20, assume that a transfer price of $72 has been established and that 25,000 units of materials are transferred, with no reduction in the Electronic Division’s current sales.
a. How much would Retina Manufacturing’s total income from operations increase?
b. How much would the Aircraft Division’s income from operations increase?
c. How much would the Electronic Division’s income from operations increase?
d. If the negotiated price approach is used, what would be the range of acceptable transfer prices and why?
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a This amount is the same amount by which Retina Manufacturings income from operations increased in ...View the full answer
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