Business, 08.10.2020 09:01, restinpeicejahseh
Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $217 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $180 per unit. a. If a transfer price of $197 per unit is established and 43,300 units of materials are transferred, with no reduction in the Components Division's current sales, how much would Ziegler Inc.’s total operating income increase?
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