Ask Question
Today, 14:47

The Heating Division of Kobe International produces a heating element that it sells to its customers for $46 per unit. Its variable cost per unit is $29, and its fixed cost per unit is $5. Top management of Kobe International would like the Heating Division to transfer 14,800 heating units to another division within the company at a price of $32. The Heating Division is operating at full capacity. Assume that the units being requested are special high-performance units and that the division's variable cost would be $23 per unit (rather than $29). What is the minimum transfer price that the Heating Division should accept?

+5
Answers (1)
  1. Today, 17:11
    0
    The minimum transfer price that the Heating Division should accept is $40 per unit.

    Explanation:

    Minimum transfer price = Selling price to outsider + additional cost

    = $46 + (23 - 29)

    = $40 per unit

    Therefore, The minimum transfer price that the Heating Division should accept is $40 per unit.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The Heating Division of Kobe International produces a heating element that it sells to its customers for $46 per unit. Its variable cost ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers