FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $52 per unit. Division B is able to supply Division A with 20,700 units at a variable cost of $48 per unit. The two divisions have recently negotiated a transfer price of $46 per unit for the 20,700 units. Enter an increase as a positive number and a decrease as a negative number.

a. By how much will each division's income increase as a result of this transfer?

Division A $
Division B $

b. What is the total increase in income for Hibiscus Company?

$

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