Question: Next Level (NL) is a division of Global Electronics, Inc. NL produces videogame systems. These systems are sold to retailers. NL recently approached the manager

Next Level (NL) is a division of Global Electronics, Inc. NL produces videogame systems. These systems are sold to retailers. NL recently approached the manager of the personal computer (PC) division regarding a request to buy a special circuit board for a new advanced video game system. NL has requested that the personal computer division pro- duce 200,000 units of this special circuit board. The following facts are available regarding the personal computer division:
Selling price of standard circuit board..................$54
Variable cost of standard circuit board..................30
Additional variable costs of special circuit board......20
Instructions
For each of the following independent situations, calculate the minimum transfer price, and discuss whether the internal transfer should take place or whether Next Level should purchase the circuit board externally.
(a) Next Level has offered to pay the PC division $62 per circuit board. The PC division has no available capacity. The PC division would have to forgo sales of 200,000 circuit boards to existing customers in order to meet the request of Next Level.
(b) Next level has offered to pay the PC division $90 per circuit board. The PC division has no available capacity. The PC division would have to forgo sales of 250,000 circuit boards to existing customers in order to meet the request of Next Level.
(c) Next Level has offered to pay the PC division $62 per circuit board. The PC division has available capacity.

Step by Step Solution

★★★★★

3.36 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Assuming no available capacity and that the number of new units produced would be equal to the num... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1190-B-M-A-J-O-C(3142).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Innovative Systems (IS) is a division of Global Electronics, Inc. IS produces videogame systems. These systems are sold to retailers. IS recently approached the manager of the Laptop Computer...

Jose is a general manager of a division of Global Operations. In that capacity, he knows that his company is planning on making layoffs soon. Juan, a good friend in another division, tells Jose he is...

Janet Cosgrove is the manager of Saratoga Sporting Goods, a division of Global Sports. Cosgroves division sells a variety of sporting goods and supplies to wholesalers and retail chains throughout...

2-Chapter 9 Next Level (NL) is a division of Global Electronics, Inc. NL produces video game systems. These systems are sold to retailers. NL recently approached the manager of the personal computer...

Next Step (NS) is a division of Worldwide Electronics, Inc. NS produces videogame systems. These systems are sold to retailers. NS recently approached the manager of the Personal Computer Division...

Innovative Systems (IS) is a division of Global Electronics, Inc. IS produces videogame systems. These systems are sold to retailers. IS recently approached the manager of the Laptop Computer...

After almost a decade as CEO, Tim Cook could look back at his record at Apple with enormous pride. During his tenure, Apple became the world's first trillion dollar market cap company. The firm's...

hi. I'm stuck with a report whose Chic Paints Ltd. and I am finding difficulty to answer some questions such as the organisations accounting system requirements including hardware and software...

Pacific Systems Elcom Sure Tech E-Drive Park Current Ratio 1.2 1.3 1.3 1.1 Inventory Turnover 5.2 5.4 9 7 Long-Term Debt Ratio to Assets 0.25 0.15 0.17 0.4 Receivable Days 49 29 59 40 Payable Days...

Compute NNO for 2013 and 2014. Please list all nonoperating liabilities and nonoperating assets. 10-K 1 a14-5644_110k.htm 10-K Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION...

Doing the computations by hand, find the determinant of the matrix A. 11011 01212 12131 11001 22012

1. Estimate the average binding energy for 10244Ru from Figure. 2. Estimate the average binding energy for 15363Eu from Figure. 3. Estimate the average binding energy for 18775Re from Figure. 4. Find...

Ches Assexument Question 3 of 1 0 Vies Policies Current Attempt in Pregess Kingbied. inc. puechased a delivery truck for $ 4 4 , 0 0 0 on 1 awuary 1 , 2 0 2 2 . The truck has anesected salrage value...

According to Table 22.3, now many years will it take for per capita GDP to double in (a) China? (b) Madagascar? (c) Zimbabwe?

What type of industry is likely to use a job order cost system? Give some examples.

python 3 grid game using Zelle's graphics.py NOT turtle or pygame or any other program I have a window 400x400 which I have split up into a 10x10 'grid' using lines so each square is 40x40 pixels...

Which of the following is not a method for incorporating risk into capital budgeting? a. Positive Negative analysis b. Monte Carlo simulations c. Scenario analysis d. Sensitivity analysis e. Decision...

General Electric sold jet engines on credit to Air France and invoiced 10 million payable in six months. Currently, the six-month forward exchange rate is $1.25/ and the foreign exchange advisor for...