Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below:Selling price to outside customers....Variable cost per unit.Total fixed costs.......Capacity in units.$50$30Select one:O a. $50O b. $49O c. $46O d. $30$400,00025,000Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Ycurrently purchases a similar part made by an outside company for $49 per unit and would substitute the part made by DivisionX. Division Y requires 5,000 units of the part each period. Division X has ample excess capacity to handle all of Division Y'sneeds without any increase in fixed costs and without cutting into outside sales. According to the formula in the text, what is thelowest acceptable transfer price from the standpoint of the selling division?

Here in this question, we are required to calculate lowest acceptable transfer price.Transfer Price…

Answered: Division X makes a part that it sells…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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