18. $190 19. $233.6364 20. $67,500 Use the following information to answer quest
ID: 2496109 • Letter: 1
Question
18. $190
19. $233.6364
20. $67,500
Use the following information to answer questions 18 through 20. Advantech, Inc. makes circuit boards and testing devices. Its operations are organized into two divisions: Circuits, which makes many types of circuit boards, and Testing, which makes many types of testing devices. Each division is evaluated as a profit center Circuit Division is the sole manufacturer of a patented circuit board. It sells these boards to external customers and also transfers them to the Testing Division. Circuit provided the following information about these circuit boards. Production and Capacity Capacity (in units) Production (in units) Units sold to outside customers Units sold to Testing Division 1,000 0,000 17,000 3,000 Selling price and costs Selling price per unit Variable cost per unit Fixed cost per unit $350.00 190.00 0.00 Testing pro vided the following information about the signal detectors it makes using these circuit boards. Number of circuit boards in each signal detector Additional variable costs per unit to create signal detector.$135 Selling price per signal detector 530 18. From the standpoint of Circuit division, what is the lowest acceptable transfer price per unit for the boards transferred to Testing? 19. The demand for Testing Division's signal detector is increasing rapidly. Next year, Testing wants to purchase 5,500 units from Circuit Division. From the standpoint of Circuit division, whawl be the lowest acceptable transfer price per unit for these units?Explanation / Answer
18)Minimum price should be equal to variable cost of making = $ 190 per unit
19)There will be shortage of production capacity at that demand level = 21000 - 5500 = 15500 sales to external customer
SO there will be loss of contribution on external customer = (17000 - 15500) = 1500 units * (350-190)
= 1500* 160 = 240000
Variable cost of = 5500 *190 = $ 1045000
Total minimum price required = (1045000 + 240000 ) /5500
= 1285000 / 5500
= 233.6364
20) I am sorry but i am not sure of this part.
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