Division A transfers 100,000 units of a component to Division B each year. The market price of

Question:

Division A transfers 100,000 units of a component to Division B each year. The market price of the component is $\$ 25$. Division A's variable cost is $\$ 15$ per unit, and A's divisional's fixed costs are $\$ 500,000$ each year.

What price would be credited to Division A for each component that it transfers to Division B under:

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P2 Advanced Management Accounting

ISBN: 9781839962363

1st Edition

Authors: Kaplan

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Question Posted: Mar 21, 2024 11:00 PM

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Division A transfers 100,000 units of a component to Division B each year. The market price of

Question:

Dual pricing (based on marginal cost and market price)? Two-part tariff pricing (where the Divisions have agreed that the fixed fee will be $200,000)?

Step by Step Answer:

P2 Advanced Management Accounting

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