Business, 01.05.2021 03:10 medusa36

Conglomerate Co. has two divisions. Division A manufactures widgets while Division B manufactures woblets. In the production of widgets, one of the key components is a woblet and, hence, Division A could source its woblets temporarily directly from Division B rather than going to the external market. The following data pertains to woblets: Sales price $60.00 per woblet Direct materials 22.00 Direct labor 10.00 Variable overhead 6.00 Allocated fixed costs 12.00 Division A has asked Division B to supply 4,000 woblets. Currently, Division B has the capacity to make 10,000 woblets annually. If Division B is currently producing 5,000 woblets, what is the minimum transfer price per custom woblet that would permit Division B to maintain profit at current levels

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Conglomerate Co. has two divisions. Division A manufactures widgets while Division B manufactures wo...

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