Assume that a transfer price of $162 has been established and that 37,500 units of materials are transferred, with no reduction in the Components Division's current sales. a. How much would XPort Industries' total income from operations increase? b. How much would the Instrument Division's income from operations increase? c. How much would the Components Division's income from operations increase? d. Any transfer price will cause the total income of the company to ,as long as the supplier division capacity is toward making materials for products that are ultimately sold to the outside.

Assume that a transfer price of $162 has been established and that 37,500 units of materials are transferred, with no reduction in the Components Division's current sales. a. How much would XPort Industries' total income from operations increase? b. How much would the Instrument Division's income from operations increase? c. How much would the Components Division's income from operations increase? d. Any transfer price will cause the total income of the company to ,as long as the supplier division capacity is toward making materials for products that are ultimately sold to the outside.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...

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