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Calculate the optimal transfer price assuming the chocolate

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Reference no: EM132594667

M Products, LLP, has two divisions - Choc and Min. The Choc division typically sells to the Min division for $3 per pound, which covers variable costs. The Choc division sells to outside customers for $5 per pound.

Use the general economic transfer pricing rule to address the following requirements:

Question 1: Calculate the optimal transfer price assuming the Chocolate division is below capacity.

Question 2: Calculate the optimal transfer price assuming the Chocolate division is at capacity.

Reference no: EM132594667

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