Bottle Division of TJR Company makes bottles that can either be sold to outside customers or transferred internally. Last month, the Soda Division bought 3,000 from the Bottle Division for $27 each. Additional available information is:

Capacity 8,000 bottles
Selling Price per Bottle to Outside Customers $30
Variable Costs per Bottle Sold to Outside Customers $18

If an internal transfer is done, the company can save $1.50 on administrative expenses. An outside supplier has offered to supply bottles to the Soda Division for $25 each.

If 7,000 bottles can be sold externally, what is the transfer price range?

Answer rating: 100% (QA)

To determine the transfer price range we need to compare the costs and savings associated with inter... View the full answer