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8090 [49]
2 years ago
11

Darrin’s Auto Northern Division is currently purchasing a part from an outside supplier. The company's Southern Division, which

has no excess capacity, makes and sells this part for external customers at a variable cost of $15 and a selling price of $27. If Southern begins sales to Northern, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by $3. On the basis of this information, Southern would establish a transfer price of:
Business
1 answer:
Marina86 [1]2 years ago
5 0

Answer:

Transfer price = $24

Explanation:

As per the data given in the question,

The excess capacity of Company's Southern division is nill therefore for transferring the units the division will have to decrease its external sales.The Loss occurred due to reduction in external sales should be from inter divisional transfer price. Therefore,

Transfer price = variable cost + Loss of contribution

= ($15 - $3) + ($27 - $15)

= $24

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What is the term for the time at which maximum levels of petroleum extraction are reached?
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2 years ago
A customer in a coffee shop purchases a blend of two coffees: kenyan, costing $3.50 a pound, and sri lankan, costing $5.60 a pou
Rom4ik [11]
We have to make a system of equations:
x + y = 7;  where x stays for pounds of Kenyan coffee, and y stays for pounds of Sri Lankan coffee. And: 3.50 * x + 5.60 * y = 33.95 ( total cost ).
From the 1st equation: x = 7 - y. We have to substitute it into the 2nd equation:
3.50 * ( 7 - y ) + 5.60 * y = 33.95
24.50 - 3.50 y + 5.60 y = 33.95
5.60 y - 3.50 y = 33.95 - 24.50
2.10 y = 9.45
y = 9.45 : 2.10
y = 4.5 lb;  x = 7 - 4.5 = 2.5 lb.
Answer: 2.5 lb of Kenyan coffee and 4.5 lb of Sri Lankan.
7 0
3 years ago
A 6-year bond, 8% semiannual coupon bond sells at par ($1,000). Another bond of equal risk, maturity, and par value pays an 8% a
timofeeve [1]

Answer:

Explanation:

  • The bond has 8% coupon paid semiannually, and those bonds sell at their par value.
  • Since the bond sales at par value, Market rate (Yield) = Coupon rate =8%

<u>Second bond:</u>

  • Coupon rate = 8%
  • Par value = $1,000
  • Semiannual coupon amount = 1000 x 8%/2 = $40
  • Time to maturity = 6 years = 12 semiannual periods
  • Semiannual Yield = 8%/2 = 4%

To get price of this bond we will use PV function of excel:

= PV (rate, nper, pmt, fv, type)

= PV (4%, 12, -40, -1000, 0)

= $1053.32

  • Price of this bond = $1,053.3
7 0
2 years ago
Read 2 more answers
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