Division A of Oshawa Corporation makes and sells a single product that is used by manufacturers of refrigerators. Presently, it sells 42,000 units per year to outside customers at $50 per unit. The annual capacity is 50,000 units, and the variable cost to make each unit is $42. Fixed costs are s100,000. Refrigerator Division of Oshawa Corporation would like to buy 10,000 units a year from Division A to use in its products. It currently purchases this product from an outside supplier for $46 per unit. What should be the lowest acceptable transfer price from the perspective of Division A? A) B) C) D) E) $42.00. $44.00 $43.60 $50.00. $46.00.
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- Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?Division X of Charter Corporation makes and sells a single product that's used by manufacturers of forklift trucks. Presently it sells 12,000 units per year to outside customers at $24 per unit. The annual capacity is 20,000 units, and the variable cost to make each unit is $16. Division Y of Charter Corporation would like to buy 10,000 units a year from Division X to use in its products. There would be no cost savings from transferring the units within the company rather than selling them on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X?
- Division X of Cathy Corporation makes and sells a single product which is used by manufacturers of fork lift trucks. Presently it sells 14,000 units per year to outside customers at P 24 per unit. The annual capacity is 20,000 units and the variable cost to make each unit is P 15.40 Division Y of Cathy Corporation would like to buy 10,000 units a year from Division X to use in its products. There would be no cost savings from transferring the units within the company rather than selling them on the outside market. The lowest acceptable transfer price from the perspective of Division X would be P. per unit (round off to 2 decimal places)The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a retail price of $103 each. Each trailer incurs $48 of variable manufacturing costs. The Trailer division has capacity for 29,000 trailers per year and incurs fixed costs of $490,000 per year. Required:1. Assume the Assembly division of Baxter Bicycles wants to buy 4,400 trailers per year from the Trailer division. If the Trailer division can sell all of the trailers it manufactures to outside customers, what price should be used on transfers between Baxter Bicycles's divisions?2. Assume the Trailer division currently only sells 9,200 Trailers to outside customers, and the Assembly division wants to buy 4,400 trailers per year from the Trailer division. What is the range of acceptable prices that could be used on transfers between Baxter Bicycles's divisions?Collyer Products Inc. has a Valve Division that manufactures and sells a standard valve as follows: Capacity in units 10,000 Selling price to outside customers on the intermediate market $ 15 Variable costs per unit $ 8 Fixed costs per unit (based on capacity) $ 5 The company has a Pump Division that could use this valve in the manufacture of one of its pumps. The Pump Division is currently purchasing 10,000 valves per year from an overseas supplier at a cost of $14 per valve. Required:1. Assume that the Valve Division has ample idle capacity to handle all of the Pump Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions? 2. Assume that the Valve Division is selling all that it can produce to outside customers on the intermediate market. What is the minimum transfer price acceptable to the Valve Division for transfers to the Pump Division? 3. Assume again that the Valve Division is selling all that it can…
- 4. Wheel Division of TG Corporation has the capacity for making 80,000 wheel sets per year and regularly sells 65,000 each year on the outside market. The regular sales price is $111 per wheel set, and the variable production cost per unit is $75. Division Q of TG Corporation currently buys 20,000 wheel sets (of the kind made by Wheel Division ) yearly from an outside supplier at a price of $100 per wheel set. Division Q would like to buy the 20,000 wheel sets it needs annually from Wheel Division at $95 per wheel set. A) Is there an acceptable Transfer Price range? What would it be? Show any necessary calculations to receive full marks. B) What would be the amount of change in annual operating income for the TG company as a whole, compared to what it is currently? Show any necessary calculations to receive full marks.Germano Products, Incorporated, has a Pump Division that manufactures and sells a number of products, including a standard pump that could be used by another division in the company, the Pool Products Division, in one of its products. Data concerning that pump appear below: Capacity in units 70,000 Selling price to outside customers $ 77 Variable cost per unit $ 27 Fixed cost per unit (based on capacity) $ 31 The Pool Products Division is currently purchasing 16,000 of these pumps per year from an overseas supplier at a cost of $72 per pump. Assume that the Pump Division is selling all of the pumps it can produce to outside customers. Does there exist a transfer price that would make both the Pump and Pool Products Division financially better off than if the Pool Products Division were to continue buying its pumps from the outside supplier? Multiple Choice Yes, both divisions are always better off regardless of whether the selling division has enough idle…The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry childrenor cargo. The trailers have a retail price of $200 each. Each trailer incurs $80 of variable manufacturingcosts. The Trailer division has capacity for 40,000 trailers per year and incurs fixed costs of $1,000,000per year. Assume the Assembly division of Baxter Bicycles wants to buy 15,000 trailers per year from the Trailer division. If the Trailer division can sell all of the trailers it manufactures to outside customers, what price should be used on transfers between Baxter Bicycles’s divisions? Explain.
- The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a market price of $103 each. Each trailer incurs $38 of variable manufacturing costs. The Trailer division has capacity for 29,000 trailers per year and has fixed costs of $480,000 per year. 1. Assume the Assembly division of Baxter Bicycles wants to buy 5,200 trailers per year from the Trailer division. If the Trailer division can sell all of the trailers it manufactures to outside customers (and has no excess capacity), what price should be used on transfers between divisions? 2. Assume the Trailer division currently only sells 10,200 trailers to outside customers and has excess capacity. The Assembly division wants to buy 5,200 trailers per year from the Trailer division. What is the range of acceptable prices on transfers between divisions? 1. Transfer price per trailer 2. Transfer price per trailer will be at least but not more thanGermano Products, Incorporated, has a Pump Division that manufactures and sells a number of products, including a standard pump that could be used by another division in the company, the Pool Products Division, in one of its products. Data concerning that pump appear below: Capacity in units 72,500 Selling price to outside customers $ 79 Variable cost per unit $ 28 Fixed cost per unit (based on capacity) $ 32 The Pool Products Division is currently purchasing 17,000 of these pumps per year from an overseas supplier at a cost of $74 per pump. Assume that the Pump Division is selling all of the pumps it can produce to outside customers. Does there exist a transfer price that would make both the Pump and Pool Products Division financially better off than if the Pool Products Division were to continue buying its pumps from the outside supplier?Wetherald Products, Incorporated, has a Pump Division that manufactures and sells a number of products, including a standard pump that could be used by another division in the company, the Pool Products Division, in one of its products. Data concerning that pump appear below: Capacity in units 55,000 Selling price to outside customers $ 82 Variable cost per unit $53 Fixed cost per unit (based on capacity) $11 The Pool Products Division is currently purchasing 4,000 of these pumps per year from an overseas supplier at a cost of $74 per pump. Assume that the Pump Division has enough idle capacity to handle all of the Pool Products Division's needs. What should be the minimum acceptable transfer price for the pumps from the standpoint of the Pump Division? Multiple Choice $74 per unit $53 per unit $64 per unit $82 per unit