Individual Assignment

ACC 349

Individual Assignment

Ch. 8

E8-11 Allied Company's Small Motor Division manufactures a number of small motors

used in household and office appliances. The Household Division of Allied then assembles

and packages such items as blenders and juicers. Both divisions are free to buy and

sell any of their components internally or externally. The following costs relate to small

motor LN233 on a per unit basis.

Fixed cost per unit 5

Variable cost per unit 8

Selling price per unit 30

Instructions

(a) Assuming that the Small Motor Division has excess capacity, compute the minimum

acceptable price for the transfer of small motor LN233 to the Household

Division.

Variable cost opportunity cost minimum transfer price

8 0 8

(b)...