Question 44
Allcell Manufacturing is a division of Birch Communications, Inc. All cell produces cell phones as well as sells these phones to other communication companies and to Birch. Freshly the vice president of marketing for Birch approached Allcell with a request to make 20000 units of a special cell phone that could be used anywhere in the world. The following information is available regarding the Allcell division-
Selling price of regular cell phone . . . . . . . . . . $80
Variable cost of regular cell phone. . . . . . . . . . . 45
Additional variable cost of special cell phone. . . . 30
Compute the minimum transfer price as well as indicate whether the internal transfer must occur for each of the following-
Show your computations to receive credit for your answers
The marketing vice president proposals to pay Allcell $95 per phone. Allcell has accessible capacity.
The marketing vice president proposals to pay Allcell $95 per phone. Allcell has no available capacity as well as would have to forego sales of 20000 phones to existing customers to encounter this request.