Crede inc has two divisions division a makes and sells

Assignment Help Accounting Basics

Reference no: EM13567863

Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps.
Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 10,000 lamps for the coming year.

Division B has the capacity to manufacture 50,000 lamps annually. Sales to outside customers are estimated at 40,000 lamps for the next year. Reading lamps are sold at $12 each. Variable costs are $7 per lamp and include $1 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $80,000. Consider the following independent situations.

Suppose Division B could use the excess capacity to produce and sell externally 15,000 units of a new product at a price of $7 per unit. The variable cost for this new product is $5 per unit. What should be the minimum transfer price accepted by Division B for the 10,000 lamps and the maximum transfer price paid by Division A?

Minimum transfer price accepted by Division B		$ per unit
Maximum transfer price paid by Division A		$ per u

Reference no: EM13567863

Questions Cloud

Merger co has ten employees each of whom earns 2000 per : merger co. has ten employees each of whom earns 2000 per month and has been employed since january 1. fica social

Prepare the manufacturing overhead budget for the year : 1. blue lagoon corporation is projecting a cash balance of 31155 in its december 31 2011 balance sheet. blue lagoons

Omni corporations board of directors met over growing : omni corporations board of directors met over growing concern about the drop in the price of their stock. the company

The company will pay march salaries and taxes withheld on : on march 1 2011 the accounting records of stein company showed the following liability accounts and balances accounts

Crede inc has two divisions division a makes and sells : crede inc. has two divisions. division a makes and sells student desks. division b manufactures and sells reading

Benson company is considering the replacement of a machine : benson company is considering the replacement of a machine that is presently used in production. the following data are

Prepare a differential analysis dated july 19 2014 to : eclispe computer company has been purchasing carrying cases for its portable computer at a delivered cost of 65 per

Csh flow from long term investing activities totaled : w.c cycling had 55000 in cash at year end 2007 and 25000 in cash at year-ended 2008. cash flow from long term

The store has a marginal tax rate of 30 percent what is the : a proposed expansion project is expected to increase sales of jl tickers store by 35000 and increase cash expenses by

User Account

All Pages