minimum transfer price in this case is 42 92 42 92 BE 156 Freberg Company a

Minimum transfer price in this case is 42 92 42 92 be

This preview shows page 38 - 40 out of 58 pages.

BE 156Freberg Company, a division of Dudge Cars, produces automotive batteries. Freberg sells thebatteries to its customers for $92 per unit. The variable cost per unit is $55, and fixed costs perunit are $16. Top management of Dudge Cars would like Freberg to transfer 30,000 batteries toanother division within the company at a price of $61. Freberg has sufficient excess capacity toprovide the 30,000 batteries to the other division.InstructionsCompute the minimum transfer price that Freberg should accept. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving/Decision Making, IMA: Business Economics 8 - 38
Image of page 38
BE 157Freberg Company, a division of Dudge Cars, produces automotive batteries. Freberg sells thebatteries to its customers for $92 per unit. The variable cost per unit is $55, and fixed costs perunit are $16. Top management of Dudge Cars would like Freberg to transfer 30,000 special, high-performance batteries to another division within the company. Freberg’s variable cost on thesespecial batteries is $62 per unit. Freberg is operating at full capacity.InstructionsCompute the minimum transfer price that Freberg should accept. Ans: N/A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving/Decision Making, IMA: Business Economics Solution 157 (5 min) aBE 158Bundy Batteries produces batteries for laptop computers. The following per unit cost informationis available: direct materials $15; direct labor $18; variable manufacturing overhead $12; fixedmanufacturing overhead $30; variable selling & administrative expenses $15; and fixed selling &administrative expenses $20. The desired ROI per unit is $25.InstructionsCompute the markup percentage using the absorption-cost approach. $30
Image of page 39
Image of page 40

You've reached the end of your free preview.

Want to read all 58 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture