Ask Question
18 November, 21:13

The materials used by the Holly Company's Division A are currently purchased from an outside supplier. Division B is able to supply Division A with 20,000 units at a variable cost of $42 per unit. The normal price that Division B normally sells its units is $53 per unit. What is the range of transfer prices within which the two division managers should negotiate? $ to $ per unit.

+1
Answers (1)
  1. 18 November, 21:41
    0
    The range of transfer price is $42 to $53

    Explanation:

    The rationale behind the recommended transfer price is that Division B cannot sell below the variable cost of $42. Division B cannot also sell above the prevailing market price of $53. The negotiation between the two divisions ranges between $42 and $53.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The materials used by the Holly Company's Division A are currently purchased from an outside supplier. Division B is able to supply ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers