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trixr4kids trixr4kids
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A month ago
Chute Company's Extract division has collected the following information.

Normal selling price $2.90 per bottle
Variable product costs1.25 per bottle
Fixed product costs 0.50 per bottle
Variable selling and administrative costs 0.25 per bottle
Production capacity1,500,000 bottles

Assuming that the division has excess capacity of 300,000 and the Baked Goods division wants to buy 250,000 bottles, the minimum transfer price is

▸ $2.90

▸ $1.50

▸ $2.00

▸ $1.15
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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chandlerdeanechandlerdeane
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A month ago
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$1.50

Since Chute's Extract division has sufficient excess capacity, the minimum transfer price would be equal to the variable costs of $1.50 per bottle.
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trixr4kids Author
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A month ago
Thanks for your help!!
Harvinder
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Yesterday
Correct Slight Smile TY
Transonic
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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