Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: P35 and P40. What would be the effect on corporate profit if P35 is selected as the transfer price rather than P40, and the Computer Division purchases from the Computer Chip Division instead of from the external supplier? * Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip Variable costs per chip Fixed production costs Fixed SG&A costs P50 P20 P60,000 P90,000 10,000 chips 6,000 chips O chips Monthly capacity External sales Internal sales Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. O 20,000 smaller O 20,000 larger O 100,000 larger the same

Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: P35 and P40. What would be the effect on corporate profit if P35 is selected as the transfer price rather than P40, and the Computer Division purchases from the Computer Chip Division instead of from the external supplier? * Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip Variable costs per chip Fixed production costs Fixed SG&A costs P50 P20 P60,000 P90,000 10,000 chips 6,000 chips O chips Monthly capacity External sales Internal sales Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. O 20,000 smaller O 20,000 larger O 100,000 larger the same

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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