Company has a division that manufactures a component that sells for and has variable costs of and fixed costs of . Another division wants to purchase the component. What is the minimum transfer price if the division is operating at capacity?

Complete Question:

Palmo Company has a division that manufactures a component that sells for $66 and has variable costs of $29 and fixed costs of $19. Another division wants to purchase the component. What is the minimum transfer price if the division is operating at capacity?

A. $48

B. $66

C. $19

D. $29

Option D. $66 per unit

Explanation:

The transfer price can be calculated using the following Formula if the division is working at full capacity:

Lowest Transfer Price = Variable cost per unit + Contribution lost Per unit

Here

Variable cost per unit  is $29

Contribution lost Per unit = $66 - $29 = $37

By putting values in the above equation, we have:

Lowest Transfer Price = $29 + $37 = $66 per unit which is the market price of the company. If the company wasn't operating at full capacity then the minimum transfer price would be variable cost only because we will not have any contribution lost losses. This means that if the division is operation at full capacity the transfer price would be market price.

if kj of heat is transferred o 1200 g liquid water at 36'c, what would the new temperature of the water be? (he specific heat capacity of liquid water is 4.186 j/g''c)

a. 15'c

b.100'c

c.51'c

d.36'c

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi