A transfer price of 950 per unit is negotiated and 25000


Question - Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 25,000 units of material are transferred, with no reduction in Division A's current sales.

How much will Division C's income from operations increase?

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Accounting Basics: A transfer price of 950 per unit is negotiated and 25000
Reference No:- TGS02874584

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