Please type your answer to this question in the space below and show your work for maximum points. Be sure to indicate which part(s) of the question you are answering. Materials used by the Stanley Company's Division 1 are currently purchased from outside supplier at $59 per unit. Division 2 is able to supply Division 1 with 18,000 units at a variable cost of $43 per unit. The two divisions have recently negotiated a transfer price of $49 per unit for the 18,000 units. (a) By how much will each division's income increase as a result of this transfer? (b) What is the total increase in income for Stanley?

Please type your answer to this question in the space below and show your work for maximum points. Be sure to indicate which part(s) of the question you are answering. Materials used by the Stanley Company's Division 1 are currently purchased from outside supplier at $59 per unit. Division 2 is able to supply Division 1 with 18,000 units at a variable cost of $43 per unit. The two divisions have recently negotiated a transfer price of $49 per unit for the 18,000 units. (a) By how much will each division's income increase as a result of this transfer? (b) What is the total increase in income for Stanley?

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Description: Please type your answer to this question in the space below and show your work for maximum points. Be sure to indicate which part(s) ofthe question you are answering.Materials used by the Stanley Company's Division 1 are currently purchased from out

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 2CE: Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each...

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