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sanimkyei sanimkyei
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A month ago
The Transformer division of Lorman Industries produces transformers that can be sold to outside customers or transferred to the Electronics division of the company. The following information has been collected by Lorman's controller:

Production capacity100,000 units
Selling price$60 per unit
Variable production cost$36 per unit
Variable selling cost$4 per unit

Electronics need 6,000 transformers. If the Transformer division transfers its units to the Electronics division, it can avoid $2 of the variable selling cost.

Required:

a.If the Transformer division can only sell 80,000 units to outside customers, what is
the lowest acceptable transfer price that it is willing to accept for the 6,000 units?
b.If the Transformer division can sell all 100,000 units to outside customers, list three
courses of action that the division might consider providing the units to Electronics.
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Managerial Accounting

Managerial Accounting


Edition: 4th
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nalsaidynalsaidy
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A month ago
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More solutions for this book are available here
a.$36 + $4  ̶  $2 = $38
b.Alternative courses of action:
•Sell the 6,000 units to Electronics for $60 per unit
•Sell the 6,000 units to Electronics for $58 each
​[($36 + $4 - $2) + ($60 - $40) = $58
•Negotiate a price that would be acceptable to both divisions
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sanimkyei Author
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A month ago
Good timing, thanks!
lipop
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Yesterday
Thanks
TAT1238
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2 hours ago
this is exactly what I needed
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