(22) Pampered Pooches, Inc. is a factory that produces organic dog food and treats. The Oatmeal...

Transcribed Image Text:

(22) Pampered Pooches, Inc. is a factory that produces organic dog food and treats. The Oatmeal Biscuit business unit of Pampered Pooches made all sales of its product to external customers and is currently operating near their full capacity of 55,000 pounds. Oatmeal reported $42,350 of sales (50,000 pounds of biscuits), variable expenses of $26,809, and fixed expenses of $11,504. The Variety Box business unit of Pampered Pooches has asked if the Oatmeal Biscuit unit could sell them 8,700 pounds of biscuits to include with their upcoming run of new variety boxes. What will the minimum acceptable transfer price be if they do produce and sell the demanded pounds to Variety Box? A) Idle Capacity units - $0.08 per pound; No Idle Capacity units - $0.31 per pound B) Idle Capacity units - $0.31 per pound; No Idle Capacity units - $0.08 per pound C) Idle Capacity units - $0.54 per pound; No Idle Capacity units - $0.85 per pound D) Idle Capacity units - $0.85 per pound; No Idle Capacity units - $0.54 per pound 5 (22) Pampered Pooches, Inc. is a factory that produces organic dog food and treats. The Oatmeal Biscuit business unit of Pampered Pooches made all sales of its product to external customers and is currently operating near their full capacity of 55,000 pounds. Oatmeal reported $42,350 of sales (50,000 pounds of biscuits), variable expenses of $26,809, and fixed expenses of $11,504. The Variety Box business unit of Pampered Pooches has asked if the Oatmeal Biscuit unit could sell them 8,700 pounds of biscuits to include with their upcoming run of new variety boxes. What will the minimum acceptable transfer price be if they do produce and sell the demanded pounds to Variety Box? A) Idle Capacity units - $0.08 per pound; No Idle Capacity units - $0.31 per pound B) Idle Capacity units - $0.31 per pound; No Idle Capacity units - $0.08 per pound C) Idle Capacity units - $0.54 per pound; No Idle Capacity units - $0.85 per pound D) Idle Capacity units - $0.85 per pound; No Idle Capacity units - $0.54 per pound 5