What is appropriate transfer price range for better food co

Assignment Help Accounting Basics
Reference no: EM132838082

Better Food Company recently acquired an Olive Oil Processing division that has an annual capacity of 2,000,000 bottles of oil. The new division has been selling1,000,000 bottles of oil to the outside market for $4 per bottle, but Better Food wants the new division to transfer (or sell) 1,000,000 bottles of oil to the Pizza Manufacturing division. As of now, the Pizza Manufacturing is buying oil from Italy for $4.50. The current oil per unit cost for 2,000,000 bottles is:

Dir Materials per bottle $1.00

Dir labor per bottle0.50

Variable OH0.24

Fixed OH0.40

Total$2.14

Problem 1: As a company controller, what is the appropriate transfer price range that will make the new Olive Oil division and the Pizza Manufacturing division interested in this transfer?

Reference no: EM132838082

Questions Cloud

Why should risk management data and plans : Why should risk management data and plans be documented and appropriately stored?
Discuss marketing research process : discuss the marketing research process. How can a firm leverage its marketing information systems (MIS) to yield the greatest value for its research efforts?
Hire of eight aluminium runabouts : Nautilus Boat Hire is a small family-owned and operated business. It operates from a marina at the mouth of a major river and has been operating for five years.
Write a paper about the SAMM activities : Write a paper about the SAMM activities - Provide at least two references and in-text citations in APA format
What is appropriate transfer price range for better food co : What is the appropriate transfer price range that will make the new Olive Oil division and the Pizza Manufacturing division interested in this transfer?
Determine a proposed departmen mid-year budget priorities : Agency or directorate's proposed mid-year realignments and determine a proposed Department (DHS) mid-year budget priorities realignment for presentation.
Do you see trend in our society in favor of individual right : The theme of this book is individual-rights vs. public-order. A good strategy to help you understand the separation of individual-rights advocates and public.
What the production volume variance dollar amount is : What the production volume variance dollar amount is? The company uses absorption costing and fixed manufacturing overhead rate was based on the budgeted
What is the appropriate transfer price range : If the Computer Division accepts the $360 price per unit and a transfer is made, is the firm overall better or worse off and by how much?

Reviews

Write a Review

Accounting Basics Questions & Answers

  On january 14 peerless rocks inc a marble contractor issued

on january 14 peerless rocks inc. a marble contractor issued for cash 35000 shares of 15 par common stock at 51 and on

  Using a departmental allocation system with direct labor

x company has two production departmentsa and b.at the start of the yearthe following budgeted information is

  Discuss direct materials are added at the beginning

The following unit data were assembled for the assembly process of the Super Co. for the month of April. Direct materials are added at the beginning

  Phases in the audit team evaluation of internal control

What are the three major phases in the audit team's evaluation of internal control? How does the use of information technology affect the procedures performed.

  Prepare the necessary entries to record the transactions

Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash.

  Determine the equivalent unit of production for materials

Cost in beginning inventory materials cost 756, conversion cost 1508, Determine the equivalent unit of production for materials and conversion

  Discuss about the customer demand levels

What companies out there seem to be really good about increasing their customer demand levels? 200 words with references.

  Harris fabrics computes its predetermined overhead rate

Harris Fabrics computes its predetermined overhead rate annually

  What is true about modified agreement or amount owe to edgar

What is true about the modified agreement, and the amount owed to Edgar? Which of the following statements is true about the ordinance?

  How much goodwill would CVN place on their books

The fair value of the assets was $180,000. How much (if any) goodwill would CVN place on their books for this transaction

  Show the allocation of dividends to each class of stock

Show the allocation of dividends to each class of stock, assuming that the preferred stock is 8% and not cumulative

  Explain sustainable income with examples

Explain Sustainable income with examples. What are business insight to support sustainable income?discuss how the information applies to the organization.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd