The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $54 per unit. Division B is able to supply Division A with 12,700 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $51 per unit for the 12,700 units. Enter an increase as a positive number and a decrease as a negative number. a. By how much will each division's income increase as a result of this transfer? Division A $fill in the blank 1 Division B $fill in the blank 2 b. What is the total increase in income for Hibiscus Company? $fill in the blank 3
The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $54 per unit. Division B is able to supply Division A with 12,700 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $51 per unit for the 12,700 units. Enter an increase as a positive number and a decrease as a negative number. a. By how much will each division's income increase as a result of this transfer? Division A $fill in the blank 1 Division B $fill in the blank 2 b. What is the total increase in income for Hibiscus Company? $fill in the blank 3
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 14E: A company has prepared the following statistics regarding its production and sales at different...
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The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $54 per unit. Division B is able to supply Division A with 12,700 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $51 per unit for the 12,700 units. Enter an increase as a positive number and a decrease as a negative number.
a. By how much will each division's income increase as a result of this transfer?
Division A | $fill in the blank 1 |
Division B | $fill in the blank 2 |
b. What is the total increase in income for Hibiscus Company?
$fill in the blank 3
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