The Production Division A of AA Company produces units that can either be sold to...
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Accounting
The Production Division A of AA Company produces units that can either be sold to outside customers or transferred to its Equipment Division. The following data are available from the last year:
Assume the Production Division sells only 65,000 units to outside customers.
If the Production Division transfers 2,000 units to the Equipment Division at a Transfer Price of $65, what will be the gain (or loss) for AA Company as a whole?
\begin{tabular}{|l|l} \hline Production Division: & \\ \hline - Production Capacity in Units & 70,000 \\ \hline - Selling Price per Unit to Outside Customers & $100 \\ \hline - Variable Cost per Unit & $25 \\ \hline - Fixed Cost per Unit at Capacity & \\ \hline Equipment Division: & 2,000 \\ \hline - Number of Units Needed Annually & \\ \hline \end{tabular}
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