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ss7ja [257]
3 years ago
14

Palli Company has a division that manufactures a component that sells for $63 and has variable costs of $12 and fixed costs of $

21. Another division wants to purchase the component. What is the minimum transfer price if the division is operating at​ capacity?
Business
1 answer:
Ahat [919]3 years ago
7 0

Answer:

minimum transfer price $12

Explanation:

The minimum transfer price should be the cost to produce the additional units to transfer. AKA <em>marginal cost</em>

In this case, the division faces $12 of variable cost to produce a single unit.

As long as the units to transfer are within the relevant range of the current capacity the fixed cost are irrelevant for the transfer price as these are sunk cost (already incurred)

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Rowell Company spent $3 million two years ago to build a plant for a new product. It then decided not to go forward with the pro
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Open innovation’ can only operate across web-based platforms – true or false?
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2 years ago
During 2018, its first year of operations, Pave Construction provides services on account of $152,000. By the end of 2018, cash
ASHA 777 [7]

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By the end of 2018, cash collections on these accounts total $106,000.

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3 0
3 years ago
Butte sold a machine to a machine dealer for $50,000. Butte bought the machine for $55,000 several year ago and has a claimed $1
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Answer:

c. $7,500 ordinary gain  

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Depreciated value of Machine = $55,000 - $12,500  

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Gain on sale of Asset = $ 50,000 - $ 42,500

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Therefore, The amount and character of Butte's gain or loss is $7,500 ordinary gain.  

6 0
3 years ago
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