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

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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
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

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