Bramble Electronics operates as a decentralized company.Brambleâs Battery division manufactures batter chargers that aresold both externally to outside customers and internally to theCamera division. Battery divisionâs annual capacity is 83,700units. The revenue and costs associated with one battery chargerare as follows:
Selling Price to external customers $21 Variable Cost 13 Fixed Cost (based on capacity) 4
The Camera division would like to purchase 25,110 units of batterychargers; however, Cameron, the manager of the Camera division, isable to purchase the battery charger from an overseas supplier at$19.
Assuming the Battery division operates at 85%capacity, what is the range of the transfer price, if any, for thebattery charger? Cameron has learned that the Battery divisionoperates below its capacity. He is willing to pay up to $18.50 fora battery charger. Should the Battery division accept the offer at$18.50?
Minimum ? TP ? Maximum
The range $_______ ? TP ? $_________
The Battery division_____(should/should not) accept the offer to transfer the batterychargers at $18.50.
Bramble Electronics operates as a decentralized company.Brambleâs Battery division manufactures batter chargers that aresold both externally to outside customers and internally to theCamera division. Battery divisionâs annual capacity is 83,700units. The revenue and costs associated with one battery chargerare as follows:
| Selling Price to external customers | $21 | |
| Variable Cost | 13 | |
| Fixed Cost (based on capacity) | 4 |
The Camera division would like to purchase 25,110 units of batterychargers; however, Cameron, the manager of the Camera division, isable to purchase the battery charger from an overseas supplier at$19.
Assuming the Battery division operates at 85%capacity, what is the range of the transfer price, if any, for thebattery charger? Cameron has learned that the Battery divisionoperates below its capacity. He is willing to pay up to $18.50 fora battery charger. Should the Battery division accept the offer at$18.50?
| Minimum | ? TP ? | Maximum |
The range $_______ ? TP ? $_________
The Battery division_____(should/should not) accept the offer to transfer the batterychargers at $18.50.
