Division L at Reiner Ltd, manufactures 17,850 units of part #70, which it currently sells to...
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Division L at Reiner Ltd, manufactures 17,850 units of part #70, which it currently sells to outside customers. Selected data for part #70 are given below: Unit selling price to outside customers Variable production cost per unit Total fixed production cost (based on a capacity of 19,825 units per year) $88 56 $380,000 Division K at Reiner Ltd. currently purchases 7,800 units of part # 70 from an outside supplier at a price of $97. Consideration is being given to buying internally rather than from the outside supplier. What is the lowest acceptable transfer price from the perspective of Division L? Division L at Reiner Ltd, manufactures 17,850 units of part #70, which it currently sells to outside customers. Selected data for part #70 are given below: Unit selling price to outside customers Variable production cost per unit Total fixed production cost (based on a capacity of 19,825 units per year) $88 56 $380,000 Division K at Reiner Ltd. currently purchases 7,800 units of part # 70 from an outside supplier at a price of $97. Consideration is being given to buying internally rather than from the outside supplier. What is the lowest acceptable transfer price from the perspective of Division L?
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
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