How much of the shirts being sold by the retailer

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Reference no: EM132647171

The Manufacturer has an option to sell the shirts in a perfectly competitive outside market (to other retailers) where the price of the shirts is $4.

Problem (a) Find the transfer price at which the manufacturer will sell shirts to the retailer (within its own Company).

Problem (b) What is the total price at which the shirts will be sold by the retailers to the end customers?

Problem (c) How much of the shirts being sold by the retailer will be manufactured by its own manufacturing division and how much will be sourced from the outside market (if at all)?

Reference no: EM132647171

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