Question: can i get help with the last answer Materials used by Ford Company in producing Division A's product are currently purchased from outside suppliers at

can i get help with the last answer

Materials used by Ford Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit.

a. If a transfer price of $25 per unit is established and 60,000 units of material are transferred with no reductions in Division B's current sales, how much would Ford Company's total operating income increase? $600,000

b. How much would the operating income of Division A increase? $300,000

c. How much would the operating income of Division B increase? $300,000

he negotiated price approach is used, what would be the range of acceptable transfer prices? Round your answer to two decimal places. $______ to $_______

i had put 20-30 but it was wrong

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!