Business, 11.12.2019 22:31, madisonsolis05
Noble company has two divisions, a and b. division a manufactures 6,600 units of product per month. the cost per unit is calculated as follows.
variable costs $ 7.30
fixed costs 20.60
total cost $ 27.90
division b uses the product created by division a. no outside market for division a’s product exists. the fixed costs incurred by division a are allocated headquarters-level facility-sustaining costs. the manager of division a suggests that the product be transferred to division b at a price of at least $27.90 per unit. the manager of division b argues that the same product can be purchased from another company for $18.30 per unit and requests permission to do so.
required:
Answers: 2
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Noble company has two divisions, a and b. division a manufactures 6,600 units of product per month....
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