Use the data from BE9.7. If ITA’s assembly division is currently buying from an outside supplier at $75 per unit, what will be the effect on overall company profits if internal sales for 400 units take place at the optimum transfer price?

Determine effect of transfer on profit.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now


The machining division of ITA International has a capacity of 2,000 units. Its sales and cost data are:

Determine minimum transfer price.

The machining division is currently selling 1,800 units to outside customers, and the assembly division of ITA International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $5/unit. What should be the transfer price in order not to affect the machining division’s current profit?


"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"