Range of transfer prices

Division B has asked Division A of the same company to supply it with 4,000 units of part K932 this year to use in one of its products. Division B has received a bid from an outside supplier for the parts at a price of $31.00 per unit. Division A has the capacity to produce 10,000 units of part K932 per year. Division A expects to sell 8,000 units of part K932 to outside customers this year at a price of $36.00 per unit. To fill the order from Division B, Division A would have to cut back its sales to outside customers. Division A produces part K932 at a variable cost of $18.00 per unit. In addition, the cost of packing and shipping the parts for outside customers is $3.00 per unit. These packing and shipping costs would not have been incurred on sales of the parts to Division B. What is the range of transfer prices within which both the Divisions’ profits would increase as a result of agreeing to the transfer of 4,000 parts from Division A to Division B? How much would profits change this year for the overall company if this transfer took place?

We help you get better grades, improve your productivity and get more fun out of college!!

Homework Answers Online

Free title page

Free reference page

Free formatting

Unlimited revisions

WhatsApp chat

How it works – it’s easy


Place your Order

Submit your requirements through our small easy order form. Be sure to include and attach any relevant materials.

Make a payment

The total price of your order is based on the type of assignment, number of pages, academic level and deadline.


Order process

We assign the assignment to the most qualified tutor. When the tutor completes the assignment, it is transferred to one of our professional editors to ensure that the assignment meets all of your requirements.

Once complete, we’ll send your assignment via the email provided on the order form.

 It’s that simple. 

Achieve academic success with the best online tutors