Calculate the two prices Division W would have to quote

Reference no: EM132774956

Question - A profit target of '2,50,00,000,000 has been given to Division W Two other suppliers, C Ltd and H Ltd, have been established in Division B and have agreed to supply Product Z.

Division B has demanded a quote from Division W for 40,000 units of commodity Z.

Required -

Calculate the transfer price per unit of product Z that Division W should quote in order to meet target profit for the year.

Calculate the two prices Division W would have to quote to Division B, if it became AWB Ltd. policy to quote transfer prices based on opportunity costs.

Reference no: EM132774956

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