ner Exercise 88 The Heating Division of Kobe International produces a heating el
ID: 2514685 • Letter: N
Question
ner Exercise 88 The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. I variable cost per unit is $22, and its Heating Division to transfer 15,200 heating units to another division within the company at a price the Heating Division has sufficient excess the 15,200 minimum transfer price that the Heating Division should accept? fixed cost per unit is $11. Top management of Kobe International would like the of $34. Assume that hininum transfe s es capact bo prowde the 15,200 heating units to the other division. What is the Minimum transfer price LINK TO TEXTExplanation / Answer
Answer:
In case when Heating division has sufficient excess capacity to provide heating unit to another division.
Transfer price will be the variable cost i.e. $22
Total transfer price for 15200 unit will be $3,34,400
($22 * 15200 unit)
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