Division South does not have excess capacity to produce Product Y. The division can sell Product Y
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Division South does not have excess capacity to produce Product Y. The division can sell Product Y for $10 per unit outside the company. Variable costs are $6 per unit. Division North wants to purchase Product Y from Division South to use in Product ZZ. The selling price of Product ZZ is $25 per unit and variable costs to finish the product after the transfer are $12 per unit. An outside supplier will sell Product Y for $12 per unit. What is the maximum price Division North will pay for Product?
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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