Question: check parts A, B &, C. is it a decrease or increase? Help Save & Exit Rapid Industries has multiple divisions. One divisioh, Iron Products,

Help Save & Exit Rapid Industries has multiple divisions. One divisioh, Iron Products, makes a component that another division, Austin, is currently purchasing on the open market. Iron Products currently has a capacity to produce 490,000 components at a variable cost of $6,50 and a full cost of $10.50. Iron Products has outside sales of 451,000 components at a price of $14.00 per unit Austin currently purchases 45,000 units from an outside supplier at a price of $11.50 per unit. Assume that Austin desires to use a single supplier for its component a. What will be the effect on Rapid Industries' operating profit if the transfer is made internally? Assume the 45,000 units Austin needs are either purchased 100% internally or 100% externally Decrease in Prats $ 112.500 b. What is the minimum transfer price? (Round your answer to 2 decimal places.) Minimum Transfer Price c. What is the maximum transfer price? (Round your answer to 2 decimal places.) Maximum Transfer Price
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
