Solution-Prepare a schedule of safeway division

Prepare a schedule of safeway division contribution margin

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Reference no: EM13513693

1. The Safeway division of Amco Products manufactures batteries that it sells primarily to the Alpha-Beta division for inclusion with that division's main product. In 19A, half of the batteries were sold to outside companies at a price of $2 each. The remaining batteries went to the Alpha-Beta division. Cost data for 19B for the Safeway division are given below.

Production	120,000 units
Variable manufacturing costs	$1 20,000
Fixed overhead	$60,000
Selling expenses (all variable)	$30,000
Administrative expenses (all fixed)	$20,000

What should be the transfer price for the batteries if the company uses:

(a) Market price?

(b) Variable cost?

(absorption cost) for Safeway?

2. Prepare a schedule of Safeway division's contribution margin for each of the transfer pricing alternatives computed in part 1.

Reference no: EM13513693

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Prepare a schedule of safeway division contribution margin

Reference no: EM13513693

Reference no: EM13513693

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