I’m pretty sure that the answer is 17,621.66
Answer:
Option C. $0.11
Option D. $0.95
Explanation:
As we know that the Transfer Price is set at either selling price for an outside market or variable cost plus opportunity cost if the product sold is to internal market present within the organization (Inter group or inter division sales).
However, the division can still charge upper limit price to the division which is $1 market price of the product.
Upper limit = $1
As it is given that the selling of the additional units will be among divisions which means its inter division market. Hence the lower limit will be used here.
Lower Limit = Variable cost + opportunity cost
Here
Variable cost is $10 cents
And
Opportunity cost will be zero here as the division will be using its excess capacity to sell to the other division, so there is no opportunity cost.
So, by putting values, we have:
Lower Limit = $0.1 - $0 = $0.1
Upper limit = $1
Thus the transfer price set for each bell can be between $1 and $0.1. So the $0.11 and $0.95 falls between these range and both are correct options here.
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Answer:
Instructions are listed below.
Explanation:
Giving the following information:
On January 1, 2021, the Excel Delivery Company purchased a delivery van for $153,000. At the end of its five-year service life, it is estimated that the van will be worth $15,600.
Annual depreciation= 2*[(book value)/estimated life (years)]
Year 1= (153,000/5)*2= 61,200
Year 2= [(153,000 - 61,200)/5]*2= 36,720
Year 3= (55,080/5)*2= 22,032
Year 4= 13,219
Year 5= 7,932
Total= $141,103
