TEB, Inc., which manufactures video games, consists of two divisions, each operating as a profit center...

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TEB, Inc., which manufactures video games, consists of two divisions, each operating as a profit center Division A makes a component that is needed by Division B; however, if the price from Division A is too high, Division B has indicated it would purchase the component from an outside supplier. Additional information related to the divisions is: 10,000 units $150 $1,500,000 $160 Division B's annual needs for component Division As variable cost per unit Division A's annual fixed cost Price per unit from outside supplier Assume Division A sells units to outsiders for $170 each and has over 10,000 units of excess capacity which it cannot use to sell components to outsiders. Also assume both divisions know the overall company will save money by producing the units internally and transferring them from Division A to Division B. 50. The most logical minimum acceptable transfer price is 51. The most logical maximum acceptable transfer price is TEB, Inc., which manufactures video games, consists of two divisions, each operating as a profit center Division A makes a component that is needed by Division B; however, if the price from Division A is too high, Division B has indicated it would purchase the component from an outside supplier. Additional information related to the divisions is: 10,000 units $150 $1,500,000 $160 Division B's annual needs for component Division As variable cost per unit Division A's annual fixed cost Price per unit from outside supplier Assume Division A sells units to outsiders for $170 each and has over 10,000 units of excess capacity which it cannot use to sell components to outsiders. Also assume both divisions know the overall company will save money by producing the units internally and transferring them from Division A to Division B. 50. The most logical minimum acceptable transfer price is 51. The most logical maximum acceptable transfer price is

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The transfer price is the price at which one division sells a product or service to another division within the same company The transfer price should ... View the full answer