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Liapis Products,Inc.,has a Valve Division that manufactures and sells a number of products,including a standard valve that could be used by another division,the Pump Division,in one of its products.Data concerning that valve appear below: Liapis Products,Inc.,has a Valve Division that manufactures and sells a number of products,including a standard valve that could be used by another division,the Pump Division,in one of its products.Data concerning that valve appear below: The Pump Division is currently purchasing 12,000 of these valves per year from an overseas supplier at a cost of $62 per valve. Required: a.Assume that the Valve Division has enough 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? b.Assume that the Valve Division is selling all of the valves it can produce to outside customers.What is the acceptable range,if any,for the transfer price between the two divisions? c.Assume again that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $7 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions? The Pump Division is currently purchasing 12,000 of these valves per year from an overseas supplier at a cost of $62 per valve. Required: a.Assume that the Valve Division has enough 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? b.Assume that the Valve Division is selling all of the valves it can produce to outside customers.What is the acceptable range,if any,for the transfer price between the two divisions? c.Assume again that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $7 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions?

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a.From the perspective of the selling di...

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If transfer prices are to be based on cost,then the costs should be actual costs rather than standard costs.

A) True
B) False

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Mittan Products,Inc.,has a Antennae Division that manufactures and sells a number of products,including a standard antennae that could be used by another division in the company,the Aircraft Products Division,in one of its products.Data concerning that antennae appear below: Mittan Products,Inc.,has a Antennae Division that manufactures and sells a number of products,including a standard antennae that could be used by another division in the company,the Aircraft Products Division,in one of its products.Data concerning that antennae appear below: The Aircraft Products Division is currently purchasing 4,000 of these antennaes per year from an overseas supplier at a cost of $66 per antennae. Assume that the Valve Division is selling all of the valves it can produce to outside customers.From the standpoint of the Valve Division,what is the lost contribution margin if the valves are transferred internally rather than sold to outside customers? A) $48,000 B) $136,000 C) $2,312,000 D) $152,000 The Aircraft Products Division is currently purchasing 4,000 of these antennaes per year from an overseas supplier at a cost of $66 per antennae. Assume that the Valve Division is selling all of the valves it can produce to outside customers.From the standpoint of the Valve Division,what is the lost contribution margin if the valves are transferred internally rather than sold to outside customers?


A) $48,000
B) $136,000
C) $2,312,000
D) $152,000

E) B) and C)
F) None of the above

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Godina Products,Inc.,has a Receiver Division that manufactures and sells a number of products,including a standard receiver that could be used by another division in the company,the Industrial Products Division,in one of its products.Data concerning that receiver appear below: Godina Products,Inc.,has a Receiver Division that manufactures and sells a number of products,including a standard receiver that could be used by another division in the company,the Industrial Products Division,in one of its products.Data concerning that receiver appear below: The Industrial Products Division is currently purchasing 10,000 of these receivers per year from an overseas supplier at a cost of $81 per receiver. Assume that the Receiver Division is selling all of the receivers it can produce to outside customers.Does there exist a transfer price that would make both the Receiver and Industrial Products Division financially better off than if the Industrial Products Division were to continue buying its receivers from the outside supplier? A) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs. B) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division should be willing to accept. C) The answer cannot be determined from the information that has been provided. D) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division should be willing to accept. The Industrial Products Division is currently purchasing 10,000 of these receivers per year from an overseas supplier at a cost of $81 per receiver. Assume that the Receiver Division is selling all of the receivers it can produce to outside customers.Does there exist a transfer price that would make both the Receiver and Industrial Products Division financially better off than if the Industrial Products Division were to continue buying its receivers from the outside supplier?


A) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs.
B) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division should be willing to accept.
C) The answer cannot be determined from the information that has been provided.
D) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division should be willing to accept.

E) B) and D)
F) None of the above

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(Appendix 11A) Ganus Products, Inc., has a Relay Division that manufactures and sells a number of products, including a standard relay that could be used by another division in the company, the Electronics Division, in one of its products. Data concerning that relay appear below: (Appendix 11A) Ganus Products, Inc., has a Relay Division that manufactures and sells a number of products, including a standard relay that could be used by another division in the company, the Electronics Division, in one of its products. Data concerning that relay appear below: The Electronics Division is currently purchasing 7,000 of these relays per year from an overseas supplier at a cost of $59 per relay. -Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $4 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.Does there exist a transfer price that would make both the Valve and Pump Division financially better off than if the Pump Division were to continue buying its valves from the outside supplier? A) No, the selling division's price to outside customers is higher than the price that the buying division has to pay its outside supplier. B) The answer cannot be determined from the information that has been provided. C) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division would accept. Both divisions would be financially better off if the transfers were to take place. D) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs. The Electronics Division is currently purchasing 7,000 of these relays per year from an overseas supplier at a cost of $59 per relay. -Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $4 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.Does there exist a transfer price that would make both the Valve and Pump Division financially better off than if the Pump Division were to continue buying its valves from the outside supplier?


A) No, the selling division's price to outside customers is higher than the price that the buying division has to pay its outside supplier.
B) The answer cannot be determined from the information that has been provided.
C) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division would accept. Both divisions would be financially better off if the transfers were to take place.
D) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs.

E) A) and D)
F) A) and B)

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(Appendix 11A) Royal Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: (Appendix 11A) Royal Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: The Transmission Division is currently purchasing 6,000 of these connectors per year from an overseas supplier at a cost of $65 per connector. -What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division? A) $35 per unit B) $65 per unit C) $56 per unit D) $21 per unit The Transmission Division is currently purchasing 6,000 of these connectors per year from an overseas supplier at a cost of $65 per connector. -What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?


A) $35 per unit
B) $65 per unit
C) $56 per unit
D) $21 per unit

E) A) and B)
F) B) and C)

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(Appendix 11A) Germano Products, Inc., 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: (Appendix 11A) Germano Products, Inc., 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: The Pool Products Division is currently purchasing 10,000 of these pumps per year from an overseas supplier at a cost of $94 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? A) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs. B) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division should be willing to accept. C) The answer cannot be determined from the information that has been provided. D) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division should be willing to accept. The Pool Products Division is currently purchasing 10,000 of these pumps per year from an overseas supplier at a cost of $94 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?


A) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs.
B) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division should be willing to accept.
C) The answer cannot be determined from the information that has been provided.
D) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division should be willing to accept.

E) A) and C)
F) B) and D)

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Toldness Products,Inc.,has a Connector Division that manufactures and sells a number of products,including a standard connector that could be used by another division in the company,the Transmission Division,in one of its products.Data concerning that connector appear below: Toldness Products,Inc.,has a Connector Division that manufactures and sells a number of products,including a standard connector that could be used by another division in the company,the Transmission Division,in one of its products.Data concerning that connector appear below: The Transmission Division is currently purchasing 11,000 of these connectors per year from an overseas supplier at a cost of $58 per connector. What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division? A) $51 per unit B) $58 per unit C) $22 per unit D) $29 per unit The Transmission Division is currently purchasing 11,000 of these connectors per year from an overseas supplier at a cost of $58 per connector. What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?


A) $51 per unit
B) $58 per unit
C) $22 per unit
D) $29 per unit

E) B) and C)
F) A) and B)

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(Appendix 11A) Oberley Products, Inc., has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below: (Appendix 11A) Oberley Products, Inc., has a Receiver Division that manufactures and sells a number of products, including a standard receiver that could be used by another division in the company, the Industrial Products Division, in one of its products. Data concerning that receiver appear below: The Industrial Products Division is currently purchasing 5,000 of these receivers per year from an overseas supplier at a cost of $58 per receiver. -Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $6 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division? A) $61 per unit B) $46 per unit C) $67 per unit D) $58 per unit The Industrial Products Division is currently purchasing 5,000 of these receivers per year from an overseas supplier at a cost of $58 per receiver. -Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $6 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division?


A) $61 per unit
B) $46 per unit
C) $67 per unit
D) $58 per unit

E) B) and C)
F) A) and D)

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(Appendix 11A) Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows: (Appendix 11A) Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows: Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. Consider each part below independently. -If outside customers demand 70,000 units,then according to the formula in the text,what is the lowest acceptable transfer price from the viewpoint of the selling division for each of the 15,000 units needed by Q? A) $33 per unit B) $27 per unit C) $28 per unit D) $29 per unit Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. Consider each part below independently. -If outside customers demand 70,000 units,then according to the formula in the text,what is the lowest acceptable transfer price from the viewpoint of the selling division for each of the 15,000 units needed by Q?


A) $33 per unit
B) $27 per unit
C) $28 per unit
D) $29 per unit

E) B) and D)
F) B) and C)

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(Appendix 11A) Fregozo Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: (Appendix 11A) Fregozo Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: The Transmission Division is currently purchasing 8,000 of these connectors per year from an overseas supplier at a cost of $45 per connector. -Assume that the Connector Division has enough idle capacity to handle all of the Transmission Division's needs.What should be the minimum acceptable transfer price for the connectors from the standpoint of the Connector Division? A) $54 per unit B) $20 per unit C) $41 per unit D) $45 per unit The Transmission Division is currently purchasing 8,000 of these connectors per year from an overseas supplier at a cost of $45 per connector. -Assume that the Connector Division has enough idle capacity to handle all of the Transmission Division's needs.What should be the minimum acceptable transfer price for the connectors from the standpoint of the Connector Division?


A) $54 per unit
B) $20 per unit
C) $41 per unit
D) $45 per unit

E) B) and C)
F) C) and D)

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(Appendix 11A) Ebbs Products, Inc., has a Motor Division that manufactures and sells a number of products, including a standard motor. Data concerning that motor appear below: (Appendix 11A) Ebbs Products, Inc., has a Motor Division that manufactures and sells a number of products, including a standard motor. Data concerning that motor appear below: The Automotive Division of Ebbs Products, Inc needs 9,000 special heavy-duty motors per year. The Motor Division's variable cost to manufacture and ship this special motor would be $46 per unit. Because these special motors would requires more manufacturing resources than the standard motor, the Motor Division would have to reduce its production and sales of standard motors to outside customers from 86,000 units per year to 72,500 units per year. -From the standpoint of the Motor Division,what is the minimal acceptable transfer price for the special motors for the Automotive Division? A) $84.00 per unit B) $103.00 per unit C) $81.00 per unit D) $64.00 per unit The Automotive Division of Ebbs Products, Inc needs 9,000 special heavy-duty motors per year. The Motor Division's variable cost to manufacture and ship this special motor would be $46 per unit. Because these special motors would requires more manufacturing resources than the standard motor, the Motor Division would have to reduce its production and sales of standard motors to outside customers from 86,000 units per year to 72,500 units per year. -From the standpoint of the Motor Division,what is the minimal acceptable transfer price for the special motors for the Automotive Division?


A) $84.00 per unit
B) $103.00 per unit
C) $81.00 per unit
D) $64.00 per unit

E) B) and D)
F) None of the above

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(Appendix 11A) Stokan Products, Inc., has a Antennae Division that manufactures and sells a number of products, including a standard antennae that could be used by another division in the company, the Aircraft Products Division, in one of its products. Data concerning that antennae appear below: (Appendix 11A) Stokan Products, Inc., has a Antennae Division that manufactures and sells a number of products, including a standard antennae that could be used by another division in the company, the Aircraft Products Division, in one of its products. Data concerning that antennae appear below: The Aircraft Products Division is currently purchasing 5,000 of these antennaes per year from an overseas supplier at a cost of $57 per antennae. -Assume that the Antennae Division is selling all of the antennaes it can produce to outside customers.What should be the minimum acceptable transfer price for the antennaes from the standpoint of the Antennae Division? A) $40 per unit B) $63 per unit C) $57 per unit D) $22 per unit The Aircraft Products Division is currently purchasing 5,000 of these antennaes per year from an overseas supplier at a cost of $57 per antennae. -Assume that the Antennae Division is selling all of the antennaes it can produce to outside customers.What should be the minimum acceptable transfer price for the antennaes from the standpoint of the Antennae Division?


A) $40 per unit
B) $63 per unit
C) $57 per unit
D) $22 per unit

E) A) and D)
F) A) and C)

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(Appendix 11A) Two of the decentralized divisions of Gamberi Electronics Corporation are the Plastics Division and the Components Division. The Plastics Division sells molded parts to both the Components Division and to customers outside the corporation. -Assume that the Plastics Division is currently operating at full capacity.Also assume that the Components Division wants to increase the number of parts it purchases from Plastics.In order to maintain its current level of profitability,the Plastics Division should not accept any transfer price on these additional parts that is below the:


A) variable cost of the additional parts.
B) full (absorption) cost of the additional parts.
C) variable cost of the additional parts plus the lost contribution margin on all units that could no longer be sold to customers outside the corporation.
D) full (absorption) cost of the additional parts plus the lost contribution margin on all units that could no longer be sold to customers outside the corporation.

E) A) and D)
F) None of the above

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Chesley Products,Inc.,has a Connector Division that manufactures and sells a number of products,including a standard connector.Data concerning that connector appear below: Chesley Products,Inc.,has a Connector Division that manufactures and sells a number of products,including a standard connector.Data concerning that connector appear below: The company has a Transmission Division that could use this connector in one of its products.The Transmission Division is currently purchasing 8,000 of these connectors per year from an overseas supplier at a cost of $82 per connector. Required: a.Assume that the Connector Division has enough idle capacity to handle all of the Transmission Division's needs.What is the acceptable range,if any,for the transfer price between the two divisions? b.Assume that the Connector Division is selling all of the connectors it can produce to outside customers.What is the acceptable range,if any,for the transfer price between the two divisions? c.Assume again that the Connector Division is selling all of the connectors it can produce to outside customers.Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions? The company has a Transmission Division that could use this connector in one of its products.The Transmission Division is currently purchasing 8,000 of these connectors per year from an overseas supplier at a cost of $82 per connector. Required: a.Assume that the Connector Division has enough idle capacity to handle all of the Transmission Division's needs.What is the acceptable range,if any,for the transfer price between the two divisions? b.Assume that the Connector Division is selling all of the connectors it can produce to outside customers.What is the acceptable range,if any,for the transfer price between the two divisions? c.Assume again that the Connector Division is selling all of the connectors it can produce to outside customers.Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions?

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a.From the perspective of the selling di...

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Tron Products,Inc.,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: Tron Products,Inc.,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: The Pool Products Division is currently purchasing 4,000 of these pumps per year from an overseas supplier at a cost of $94 per pump. Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.Does there exist a transfer price that would make both the Valve and Pump Division financially better off than if the Pump Division were to continue buying its valves from the outside supplier? A) The answer cannot be determined from the information that has been provided. B) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division would accept. C) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs. D) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division would accept. The Pool Products Division is currently purchasing 4,000 of these pumps per year from an overseas supplier at a cost of $94 per pump. Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.Does there exist a transfer price that would make both the Valve and Pump Division financially better off than if the Pump Division were to continue buying its valves from the outside supplier?


A) The answer cannot be determined from the information that has been provided.
B) No, the minimum transfer price that the selling division should be willing to accept exceeds the maximum transfer price that the buying division would accept.
C) Yes, both divisions are always better off regardless of whether the selling division has enough idle capacity to handle all of the buying division's needs.
D) Yes, the minimum transfer price that the selling division should be willing to accept is less than the maximum transfer price that the buying division would accept.

E) B) and C)
F) A) and D)

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Division E of Harveq Company has the capacity for making 6,000 motors per month and regularly sells 5,400 motors each month to outside customers at a contribution margin of $54 per motor.The variable cost per motor is $41.Division F of Harveq Company would like to obtain 900 motors each month from Division E.What should be the lowest acceptable transfer price from the perspective of Division E?


A) $59.00 per unit
B) $54.00 per unit
C) $41.00 per unit
D) $18.00 per unit

E) A) and D)
F) B) and D)

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Shular Products,Inc.,has a Valve Division that manufactures and sells a number of products,including a standard valve that could be used by another division,the Division,in one of its products.Data concerning that valve appear below: Shular Products,Inc.,has a Valve Division that manufactures and sells a number of products,including a standard valve that could be used by another division,the Division,in one of its products.Data concerning that valve appear below: The company has a Pump Division that could use this valve in one of its products.The Pump Division is currently purchasing 8,000 of these valves per year from an overseas supplier at a cost of $47 per valve. Required: a.Assume that the Valve Division has enough 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? b.Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $5 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions? The company has a Pump Division that could use this valve in one of its products.The Pump Division is currently purchasing 8,000 of these valves per year from an overseas supplier at a cost of $47 per valve. Required: a.Assume that the Valve Division has enough 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? b.Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $5 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions?

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a.From the perspective of the selling di...

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Siegrist Products,Inc.,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: Siegrist Products,Inc.,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: The Pool Products Division is currently purchasing 12,000 of these pumps per year from an overseas supplier at a cost of $54 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? A) $47 per unit B) $60 per unit C) $36 per unit D) $54 per unit The Pool Products Division is currently purchasing 12,000 of these pumps per year from an overseas supplier at a cost of $54 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?


A) $47 per unit
B) $60 per unit
C) $36 per unit
D) $54 per unit

E) C) and D)
F) All of the above

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(Appendix 11A) Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows: (Appendix 11A) Division P of the Nyers Company makes a part that can either be sold to outside customers or transferred internally to Division Q for further processing. Annual data relating to this part are as follows: Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. Consider each part below independently. -If outside customers demand 80,000 units and if,by selling to Division Q,Division P could avoid $4 per unit in variable selling expense,then according to the formula in the text,what is the lowest acceptable transfer price from the viewpoint of the selling division? A) $35 per unit B) $21 per unit C) $31 per unit D) $33 per unit Division Q of the Nyers Company requires 15,000 units per year and is currently paying an outside supplier $33 per unit. Consider each part below independently. -If outside customers demand 80,000 units and if,by selling to Division Q,Division P could avoid $4 per unit in variable selling expense,then according to the formula in the text,what is the lowest acceptable transfer price from the viewpoint of the selling division?


A) $35 per unit
B) $21 per unit
C) $31 per unit
D) $33 per unit

E) None of the above
F) A) and C)

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