Ganus Products, Inc., has a Relay Division that manufactures and sells a number of products, including a standard relay that could be used by another division in the company, the Electronics Division, in one of its products. Data concerning that relay appear below: Capacity in units 55,000 Selling price to outside customers $ 43 Variable cost per unit $ 13 Fixed cost per unit (based on capacity) $ 25 The Electronics Division is currently purchasing 7,700 of these relays per year from an overseas supplier at a cost of $40 per relay. Assume that the Relay Division is selling all of the relays it can produce to outside customers. Also assume that $5 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. Does there exist a transfer price that would make both the Relay and Electronics Division financially better off than if the Electronics Division were to continue buying its relays from the outside supplier?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Ganus Products, Inc., has a Relay Division that manufactures and sells a number of products, including a standard relay that could be used ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Vail is one of the largest ski resorts in the United States. Suppose that on October 1, 2021, Vail sells gift cards (lift passes) for $100,000. The gift cards are redeemable for one day of skiing during the upcoming winter season.
Answers (1)
Sheffield Corporation has outstanding 1,800 $1,000 bonds, each convertible into 40 shares of $10 par value common stock.
Answers (1)
How has the pattern of trade changed in the United States since 1960? A. Exports and imports have grown at the same rate, and the United States has remained a net exporter. B.
Answers (1)
When researching your perspective business, it's most important that you know your product and your
Answers (1)
Two years ago, Jason Jennings and Mary Scott each owned a small chain of bagel restaurants in Orange County, California. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain.
Answers (1)
New Questions in Business
Year-to-date, Oracle had earned a - 1.38 percent return. During the same time period, Valero Energy earned 7.62 percent and McDonald's earned 0.40 percent.
Answers (1)
the market value of a property is $90,000 and is assessed at 35%. The annual taxes are $1,260. What is the tax rate?
Answers (1)
Information related to plant assets, natural resources, and intangibles at the end of 2020 for Kingbird, Inc.
Answers (1)
If, at the current price, there is a shortage of a good, then a. sellers are producing more than buyers wish to buy. b. the market must be in equilibrium. c. the price is below the equilibrium price. the. quantity demanded equals quantity supplied
Answers (1)
O'Connell & Co. expects its EBIT to be $42,000 every year forever. The firm can borrow at 6 percent. O'Connell currently has no debt, and its cost of equity is 10 percent and the tax rate is 35 percent.
Answers (1)