Reference no: EM132936612

Question - The directors of Snackpacks are also considering using the Popcorn Division to produce an ingredient for the new Crisps range. This would require the transfer of 30,000 units of Popcorn's 'Salty' product. Popcorn already produces this ingredient for external customers and should have some spare capacity due to the reorganisation. Alternatively, the ingredient could be purchased from an external supplier for £2.50 per unit. Snackpacks diversified by buying existing businesses and has never transferred products internally before. The table below provides information relating to Popcorn's products.

Required - Calculate the minimum and maximum transfer price if Popcorn has spare machine capacity and the minimum and maximum transfer price if Popcorn has no spare machine capacity.