1. Refer to Kingwood Corporation. What is the minimum price per unit that X Division could accept from Y Division for 5,000 units of the gear assembly and be no worse off than currently? 2. Refer to Kingwood Corporation. What will be the effect on overall corporate profits if the two divisions agree to an internal transfer of 5,000 units?
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1. Refer to Kingwood Corporation. What is the minimum price per unit that X Division could accept from Y Division for 5,000 units of the gear assembly and be no worse off than currently?
2. Refer to Kingwood Corporation. What will be the effect on overall corporate profits if the two divisions agree to an internal transfer of 5,000 units?
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- Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 26,000 units from an outside supplier for $16 per unit. Polk is currently operating at less than its fll capacity of 580,000 units and has variable costs of $8 per unit. The full cost to manufacture the unit is $11. Polk currently sells 460,000 units at a selling price of $19 per unit. a. What will be the effect on Avery Company's operating profit if the transfer is made internally? b. What is the minimum transfer price from Polk's perspective? Minimum Transfer PricePlease show work: The Heating Division of Pronghorn International produces a heating element that it sells to its customers for $46 per unit. Its unit variable cost is $26, and its unit fixed cost is $6. Top management of Pronghorn International would like the Heating Division to transfer 14,600 heating units to another division within the company at a price of $27. Assume that the Heating Division has sufficient excess capacity to provide the 14,600 heating units to the other division. What is the minimum transfer price that the Heating Division should accept? Minimum transfer price $The Windshield division of Fast Car Co. makes windshields for use in Fast Car’s Assembly division. The Windshield division incurs variable costs of $200 per windshield and has capacity to make 500,000 windshields per year. The market price is $450 per windshield. The Windshield division incurs total fixed costs of $3,000,000 per year. If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions?
- Zumsteg Products, Incorporated, has a Pump Division that manufactures and sells a number of products, including a standard pump. Date concerning that pump appear below: Capacity in units Selling price to outside customers Variable cost per unit Fixed cost per unit (based on capacity) 72,800 #106 70.0 $20 The company has a Pool Products Division that could use this pump in one of its products. The Pool Products Division is currently purchasing 8,800 of these pumps per year from an overseas supplier at a cost of $99 per pump. Required: Assume that the Pump Division has enough Idle capacity to handle all of the Pool Products Division's needs. What is the acceptable ange, If any, for the transfer price between the two divisions? Note: Round your answers to 1 decimal place.The Valve Division of Industrial Company produces a small valve that is used by various companies as a component part in their products. Industrial Company operates its divisions as autonomous units, giving its divisional manager great discretion in pricing and other decisions. Each division is expected to generate a rate of return of at least 14 percent on its operating assets. The Valve Division has average operating assets of P700,000. The valves are sold for P5 each. Variable costs are P3 per valve, and fixed costs total P462,000 per year. The Division has a capacity of 300,000 units.How many valves must the Valve Division sell each year to generate the desired rate of return on its assets?The Heating Division of Oriole International produces a heating element that it sells to its customers for $47 per unit. Its variable cost per unit is $23, and its fixed cost per unit is $8. Top management of Oriole International would like the Heating Division to transfer 15.000 heating units to another division within the company at a price of $35. Assume that the Heating Division has sufficient excess capacity to provide the 15,000 heating units to the other division. What is the minimum transfer price that the Heating Division should accept? Minimum transfer price $