Business, 22.04.2021 20:30 fordalolz1553
Ganus Products, Incorporated, 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 65,000 Selling price to outside customers $ 51 Variable cost per unit $ 15 Fixed cost per unit (based on capacity) $ 29 The Electronics Division is currently purchasing 9,100 of these relays per year from an overseas supplier at a cost of $48 per relay. Assume that the Relay Division is selling all of the relays it can produce to outside customers. Also assume that $9 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
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