Question: please solve quickly Muharraq Co, has Division A that manufactures and sells a number of parts, including Part XYZ. Data concerning Part XYZ appear below.

please solve quickly

Muharraq Co, has Division A that manufactures and sells a number of parts, including Part XYZ. Data concerning Part XYZ appear below.

Capacity in units 70,000

Selling price to outside customers $110

Variable cost per unit $75

Fixed cost per unit (based on capacity) $25

The company has Division B that could use Part XYZ in one of its products. Division B is currently purchasing 15,000 of Part XYZ per year from an overseas supplier at a cost of $109 per past

required:

A) Assume that Division A is selling all of Part XYZ it can produce to outside customers. What is the acceptable range, if any, for the transfer price between the two divisions?

B) Assume again that Division A is selling all of Part XYZ it can produce to outside customers. Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. What is the acceptable range, if any, for the transfer price between the two divisions?

c. Based on requirement (a), assume Division A offers to sell 15,000 units to Division B for $125 and that Division B refuses this price. What will be the loss in potential profits for Division A?

under of pas, eg Pt XY D Pat XYZ 1000 www TH opacity They hasDB ut could use Pas XYZ s products Division Benantly pachning 15,000 Pat XY per you B. Asume aam that Devision A is selling all of Part XYZ it can produce to outside customers. Also aume that $3 in variable expenses can be add shipping and selling costs. What is the acceptable range, if any, for the tratefer price between the two decisions? (4 marks] Based on requirement (4), anume Division A offers to sell 15,000 units to Division B3 for $125 and that Division B sefines this price. What will be the fos in pearl pod to DAD marks]

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