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The CE Bakery has identified several processes required to produce one cupcake. The company treats each process as a separate division and charges transfer prices between internal processes. The company sells 45,000 cupcakes in one year.
Purchasing Baking Packaging Customer Service
Cost per cupcake $0.95 $0.50 $0.35. $0.40
Transfer price $1.15. $1.75. $2.20. $2.85
Problem 1: Calculate the net profit for each division.
Problem 2: Calculate total yearly profit for the CE Bakery.
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