1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Usimov [2.4K]
3 years ago
7

Chen Company’s Small Motor Division manufactures a number of small motors used in household and office appliances. The Household

Division of Chen then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell any of their components internally or externally. The following costs relate to small motor LN233 on a per unit basis.
Fixed cost per unit $ 5
Variable cost per unit $11
Selling price per unit $35 Instructions
(a) Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small motor LN233 to the Household Division.
(b) Assuming that the Small Motor Division does not have excess capacity, compute the min-imum acceptable price for the transfer of the small motor to the Household Division.
(c) Explain why the level of capacity in the Small Motor Division has an effect on the transfer price.
Business
1 answer:
liq [111]3 years ago
3 0

Answer:

a. $11

b. $35

c. If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.

Explanation:

The minimum acceptable price is the price that is acceptable to the transferring division and out of a range of acceptable prices, it is that which would be the best for the company.

When there is excess capacity.

Note : No opportunity costs would exist.

Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost

                                            = $11

When there is excess capacity.

Note : Opportunity costs would exist.

Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost

                                            = $11 + ($35 - $11 )

                                            = $35

Why Capacity of transferring division (Small Motor Division) has an effect on the transfer price.

If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.

You might be interested in
everyday, pepsi products are delivered to grocery stores, gas stations, vending machines, and restaurants in the united states a
Elis [28]

Every day, Pepsi products are delivered to grocery stores, gas stations, vending machines, and restaurants in the united states and locations around the world. to accomplish this task, pepsi must have an expedient to get its products from its source to the consumer in the supply chain.

<h3>What is Pepsi?</h3>
  • PepsiCo produces the carbonated soft drink known as Pepsi.
  • Caleb Bradham first invented and introduced Brad's Drink in 1893. In 1898, it was renamed Pepsi-Cola, and in 1961, the name was abbreviated to Pepsi.
  • Caleb Bradham created Pepsi at his drugstore in New Bern, North Carolina, where it was first sold in 1893 under the name "Brad's Drink".
<h3>What stands for Pepsi?</h3>
  • In 1893, Caleb Bradham created the first Pepsi beverage at his drugstore in New Bern, North Carolina, and sold it under the name "Brad's Drink."
  • In 1898, the drink's name was changed to Pepsi Cola in honor of the recipe's inclusion of kola nuts and the digestive enzyme pepsin.

Learn more about Pepsi here:

brainly.com/question/13373374

#SPJ4

7 0
2 years ago
Which occupation has the most fatal injuries?
sattari [20]

Answer:

law enforcement

Explanation:

4 0
2 years ago
Identify and explain three reasons that an artist would elect to present content through abstract or non-representational form,
alexira [117]
There are at least 3 reasons why an artist would represent their ideas in abstract form. First, they may try to show the essential form or shape of the subject matter as in some paintings of the Group of Seven or Emily Carr in Canada in portraying snowy mountains or forests for example. Then, they may show disfigured people and horses screaming their outrage and dismay at being bombed like the painting of Guernica by Picasso to show outright rejection of the terrible bombing of Guernica in Spain by the Nazis in WWII. Also, color in an abstract painting can show the emotions of the painter such as in dark forests by Emily Carr to capture the feeling of being inside a dense forest of being closed in yet surrounded by wonderful vegetation.
6 0
3 years ago
depreciation expense and amortization expense represent ______ items requiring adjustments to net income under the indirect meth
vodka [1.7K]

Based on the information depreciation expense and amortization expense represent non-cash items.

Non-cash items has to do with expense that does not involve paying cash.

Depreciation expense and amortization expense are non cash item as no cash payment is involve.

Although this expense may be included in a company profit or loss account or net income but they do not have effect on a company cash flow.

Non cash item like depreciation expenses and amortization expense often have effect on a company overall net income.

Inconclusion  depreciation expense and amortization expense represent non-cash items.

Learn more about non-cash item here:

<em>brainly.com/question/23158497</em>

5 0
3 years ago
Nielsen PRIZM uses ________ segmentation to classify every U.S. household as one of 66 unique market segments based on the belie
Gemiola [76]

Nielsen PRIZM uses Market Segmentation.  

Explanation:

Market division is the way toward isolating a market of potential clients into gatherings, or sections, in view of various qualities. The fragments made are made out of buyers who will react also to showcasing procedures and who share qualities, for example, comparable interests, needs, or areas.  

Market division makes it simpler for advertisers to customize their promoting efforts.  

By organizing their organization's objective market into divided gatherings, as opposed to focusing on every potential client exclusively, advertisers can be increasingly effective with their time, cash, and different assets than if they were focusing on buyers on an individual level.

Gathering comparable shoppers enables advertisers to target explicit spectators in a financially savvy way.   Market division additionally lessens the danger of a fruitless or ineffectual showcasing effort.

At the point when advertisers separate a market dependent on key attributes and customize their procedures dependent on that data, there is an a lot higher possibility of progress than if they somehow managed to make a conventional battle and attempt to actualize it over all sections.

7 0
3 years ago
Other questions:
  • Lysol sanitizing wipes entered the market at a low sales price and was supported by heavy couponing. As the initial trial period
    9·2 answers
  • Another reason fueling the boom in fast-growing technology services is _____, which, when done right, can virally spread awarene
    15·1 answer
  • Oval Inc. just paid a dividend equal to $1.50 per share on its common stock, and it expects this dividend to grow by 4 percent p
    11·1 answer
  • Abc company sells 4,530 chairs a year at an average price per chair of $175. the carrying cost per unit is $39.27. the company o
    15·1 answer
  • A client's physical count of inventories was higher than the inventory quantities per the perpetual records. This situation coul
    14·1 answer
  • Kerin is a business student interning at Benson and Hodgson, a firm specializing in exports of sophisticated equipment to other
    15·1 answer
  • ______ is compared to expansionary monetary policies adopted to counteract a recession
    9·1 answer
  • Suppose the government wants to help the coffee industry, where many producers earn relatively little. It is considering two pos
    7·1 answer
  • Perion Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direc
    12·1 answer
  • Catherine has been managing her company for a couple of years. She now plans to expand her business by bringing in fresh funding
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!