ZuoTi.Pro
Question

The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $22, and its fixed cost per unit is $11. Top management of Kobe International would like the Heating Divis

hw.png

The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $22, and its fixed cost per unit is $11. Top management of Kobe International would like the Heating Division to transfer 15,200 heating units to another division within the company at a price of $34. Assume that the Heating Division has sufficient excess capacity to provide the 15,200 heating units to the other division. What is the minimum transfer price that the Heating Division should accept?


Thank you!

college   business   accounting   
1 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Minimum Transfer Price: It is the absolute lowest price that the selling division will accept.
The selling division has a spare capcaity, therefore Fixed costs are not relevant. Therfore, in this case only the variable cost per unit is relevant for selling division.
22 Variable Cost per Unit Units Required Minimum Transfer Price 15200 334400

answered by: ANURANJAN SARSAM
1 0
Add a comment
Know the answer?
Add Answer to:
The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $22, and its fixed cost per unit is $11. Top management of Kobe International would like the Heating Divis
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit....

    The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $30, and its fixed cost per unit is $11. Top management of Kobe International would like the Heating Division to transfer 14,900 heating units to another division within the company at a price of $33. Assume that the Heating Division has sufficient excess capacity to provide the 14.900 heating units to the other division....

  • The Heating Division of Kobe International produces a heating element that it sells to its customers...

    The Heating Division of Kobe International produces a heating element that it sells to its customers for $46 per unit. Its variable cost per unit is $26, and its fixed cost per unit is $11. Top management of Kobe International would like the Heating Division to transfer 14,900 heating units to another division within the company at a price of $27. The Heating Division is operating at full capacity. What is the minimum transfer price that the Heating Division should...

  • The Heating Division of Kobe International produces a heating element that it sells to its customers...

    The Heating Division of Kobe International produces a heating element that it sells to its customers for $38 per unit. Its variable cost per unit is $23, and its fixed cost per unit is $8. Top management of Kobe International would like the Heating Division to transfer 15,400 heating units to another division within the company at a price of $31. The Heating Division is operating at full capacity. What is the minimum transfer price that the Heating Division should...

  • The Heating Division of Kobe International produces a heating element that it sells to its customers...

    The Heating Division of Kobe International produces a heating element that it sells to its customers for $46 per unit. Its variable cost per unit is $29, and its fixed cost per unit is $5. Top management of Kobe International would like the Heating Division to transfer 14,800 heating units to another division within the company at a price of $32. The Heating Division is operating at full capacity. Assume that the units being requested are special high-performance units and...

  • The Heating Division of Kobe International produces a heating element that it sells to its customers...

    The Heating Division of Kobe International produces a heating element that it sells to its customers for $47 per unit. Its variable cost per unit is $30, and its fixed cost per unit is $8. Top management of Kobe International would like the Heating Division to transfer 14,700 heating units to another division within the company at a price of $35. The Heating Division is operating at full capacity. Assume that the units being requested are special high-performance units and...

  • Brief Exercise 21-03 x Your answer is incorrect. Try again. The Heating Division of Kobe International...

    Brief Exercise 21-03 x Your answer is incorrect. Try again. The Heating Division of Kobe International produces a heating element that it sells to its customers for $46 per unit. Its variable cost per unit is $22, and its fixed cost per unit is $10. Top management of Kobe International would like the Heating Division to transfer 14,800 heating units to another division within the company at a price of $27. Assume that the Heating Division has sufficient excess capacity...

  • CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Brief Exercise 8-7 The Heating Division of Kobe International...

    CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Brief Exercise 8-7 The Heating Division of Kobe International produces a heating element that it sells to its customers for $39 per unit. Its variable cost per unit is $22, and its fixed cost per unit is $11. Top management of Kobe International would like the Heating Division to transfer 15,200 heating units to another division within the company at a price of $29. The Heating Division is operating at full capacity. What...

  • Brief Exercise 8-7 x Your answer is incorrect. Try again. The Heating Division of Kobe International...

    Brief Exercise 8-7 x Your answer is incorrect. Try again. The Heating Division of Kobe International produces a heating element that it sells to its customers for $44 per unit. Its variable cost per unit is $30, and its fixed cost per unit is $10. Top management of Kobe International would like the Heating Division to transfer 15,500 heating units to another division within the company at a price of $31. The Heating Division is operating at full capacity. What...

  • BE21.2 (LO 2) Mussatto Corporation produces snowboards. The following per unit cost information is available: direct...

    BE21.2 (LO 2) Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $12, direct labor $8, variable manufacturing overhead $6, fixed manufactur- ing overhead $14, variable selling and administrative expenses $4, and fixed selling and administrative expenses $12. Using a 30% markup percentage on total per unit cost, compute the target selling price. BE21.4 (LO 2) Morales Corporation produces microwave ovens. The following per unit cost informa- tion is available: direct materials $36, direct labor...

  • Question 29 Arian International Corporation has two divisions, Division A and Division B. Division A produces...

    Question 29 Arian International Corporation has two divisions, Division A and Division B. Division A produces a motor that sells for $87 per unit, with the following costs based on its capacity of 185,000 units: Direct materials Direct labour Variable overhead Fixed overhead $32 26 10 Division A is operating at 70% of normal capacity and Division B is purchasing 20,000 units of the same component from an outside supplier for $81 per unit. Calculate the benefit, if any, to...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT