Question: use question to answer both questions Jazzy Company's Electronics Division produces hands free audio devices. Their annual capacity is 100,000 units, the variable cost per


Jazzy Company's Electronics Division produces hands free audio devices. Their annual capacity is 100,000 units, the variable cost per unit is $25, their fixed cost per unit at full capacity is $10, and their contribution margin per unit is $40. Jazzy Company's Video Division would like to purchase 20,000 units from the Electronics Division. The Video Division can purchase the same device from an outside supplier for $70 per unit. The Electronics Division is currently producing and selling all 100,000 units. What is the maximum transfer price per unit the Video Division is willing to pay? $70 $35 575 $65 What is the lowest transfer price per unit the Electronics Division is willing to accept? $75 $35 $65 $70
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
