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Use the Following Information for the Next 2 Questions

Question 97

Multiple Choice

Use the following information for the next 2 questions.
The Machining Division has a capacity of 2,000 units. Its sales and cost data are: Use the following information for the next 2 questions. The Machining Division has a capacity of 2,000 units. Its sales and cost data are: -If the Assembly Division is currently buying from an outside supplier at $98 per unit, what will be the effect on overall company profits if internal sales take place at the optimum transfer price? A) $7,000 increase B) $7,300 increase C) $300 increase D) There is no effect
-If the Assembly Division is currently buying from an outside supplier at $98 per unit, what will be the effect on overall company profits if internal sales take place at the optimum transfer price?


A) $7,000 increase
B) $7,300 increase
C) $300 increase
D) There is no effect

Correct Answer:

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