FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Please show work: The Heating Division of Pronghorn International produces a heating element that it sells to its customers for $46 per unit. Its unit variable cost is $26, and its unit fixed cost is $6. Top management of Pronghorn International
would like the Heating Division to transfer 14,600 heating units to another division within the company at a price of $27. Assume that the Heating Division has sufficient excess capacity to provide the 14,600 heating units to the other division.
What is the minimum transfer price that the Heating Division should accept? Minimum transfer price $
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Transcribed Image Text:Please show work: The Heating Division of Pronghorn International produces a heating element that it sells to its customers for $46 per unit. Its unit variable cost is $26, and its unit fixed cost is $6. Top management of Pronghorn International would like the Heating Division to transfer 14,600 heating units to another division within the company at a price of $27. Assume that the Heating Division has sufficient excess capacity to provide the 14,600 heating units to the other division. What is the minimum transfer price that the Heating Division should accept? Minimum transfer price $
The Heating Division of Pronghorn International produces a heating element that it sells to its customers for $46 per unit. Its unit
variable cost is $26, and its unit fixed cost is $6. Top management of Pronghorn International would like the Heating Division to
transfer 14,600 heating units to another division within the company at a price of $27. Assume that the Heating Division has sufficient
excess capacity to provide the 14,600 heating units to the other division. What is the minimum transfer price that the Heating Division
should accept?
× Your answer is incorrect.
Minimum transfer price
$
20
20
expand button
Transcribed Image Text:The Heating Division of Pronghorn International produces a heating element that it sells to its customers for $46 per unit. Its unit variable cost is $26, and its unit fixed cost is $6. Top management of Pronghorn International would like the Heating Division to transfer 14,600 heating units to another division within the company at a price of $27. Assume that the Heating Division has sufficient excess capacity to provide the 14,600 heating units to the other division. What is the minimum transfer price that the Heating Division should accept? × Your answer is incorrect. Minimum transfer price $ 20 20
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