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Nesterboy [21]
3 years ago
15

The windshield division of fast car co. makes windshields for use in fast car's assembly division. the windshield division inncu

rs variable costs of 248 per windshield and has capacity to make 590000 windshields per year. The market price is $450 per windshield. The Windshield division incurs total fixed costs of $3,000,000 per year.
Required:
Assuming the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions?
Business
1 answer:
timama [110]3 years ago
4 0
Answer and Explanation:
The possible transfer prices that could be used on transfers between the Windshield and Assembly divisions is $200 to $450.
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Answer:

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Explanation:

We have given inventory at the end of April = 200 units

Expected demand during April = 50 units

Production expected during April =  100 units

We have to find the inventory at the end of march

Inventory at the end of April is given by

Inventory at the end of April = production in april - demand in april + inventory of march

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So inventory of march = 150

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