FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Jamison Textiles has two division. One division makes bolts of cloth, and the other division makes t-shirts. The cloth division makes 2 square yards of cloth for P0.26 but sells the cloth to customers for P0.43. The t-shit division can make t-shirts for P0.59 plus the cost of the 2 square yards of cloth and sells t-shirts for P7.00. The company can purchase cloth from a different company for PO.45 per 2 square yards. If Jamison Textiles has no excess capacity and wants to use a negotiated transfer price to sell cloth from the cloth division to the t-shirt division.

What should be the minimum and maximum transfer costs?

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