The Watkins Company is decentralized, and divisions are considered investment centers. Watkins specializes in sports equipment, and
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Question:
Sales Price per Unit ...........$ 18
Variable Cost per Unit .......... 6
Contribution Margin per Unit ....... $ 12
The Basketball Equipment Division can purchase a similar heavy-duty net from an outside vendor for $15.
Requirements
1. Determine the negotiable range for the transfer price.
2. What is the minimum transfer price the Netting Division should consider if operating at capacity? Below capacity?
3. What is the maximum transfer price the Basketball Equipment Division should consider?
Related Book For
Computer Organization and Design The Hardware Software Interface
ISBN: 978-0124077263
5th edition
Authors: David A. Patterson, John L. Hennessy
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