How much will the profits of appliance division increase

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Reference no: EM133696604

Assume that the Appliance Division is not producing at capacity and can meet the Housing Divisions request for dishwashers. The Housing Division is currently buying 2,000 dishwashers from an outside supplier at $270 Each. Assume that any joint benefit will be split evenly between the two divisions.

a. What is the expected transfer price based on this information in #3?

b. How much will the profits of Appliance Division increase, assuming that it sells the dishwashers internally to the Housing Division?

c. How much will the profits of Housing Division increase, assuming that it buys the dishwashers internally?

d. How much will the profits of the firm increase under this arrangement in #3?

Reference no: EM133696604

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