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What is the minimum transfer price it should accept

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Reference no: EM132945158

Problem - Use the following information for the next two questions.

The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can.

Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?

Assuming the Can Division is already operating at full capacity, what is the minimum transfer price it should accept?

Reference no: EM132945158

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