[studyhard93]

i failed 2nd attempt got 42

[studyhard93]

ok so if 13 350 is the maximum demand for external customer then 2210(15560-13350) would be the remain demand which goes to the gearbox division ?

so the minimum C co can sell to gearbox division is 40% x 2210= 884( variable cost)
=5340( since it sell to gearbox at the same price as external customer )

the min transfer price would be 5340+ 844=6224 C co can sell to gear box div

and the Maximum Price gear box div is willing to pay is 95%x 7550=7172

is my understanding correct ?

[studyhard93]

I am getting conflicting answers between the Examiners report and your report.

Does the 8010 represent the total demand for external or does it represent only the 60%.

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