Materials Used by Layton Company's Division 1 Are Currently Purchased

question 78

Essay

Materials used by Layton Company's Division 1 are currently purchased from an outside supplier at $58 per unit. Division 2 is able to supply Division 1 with 22,000 units at a variable cost of $46 per unit. The two divisions have recently negotiated a transfer price of $50 per unit for the 20,000 units.?
(a) By how much will each division's income increase as a result of this transfer?
(b) What is the total increase in income for Layton?

---

Definitions:

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief, behavior, or chain of reasoning.

Surveillance State

A concept where the government extensively monitors the activities and communications of its citizens, typically through the use of technology.

Aadhaar

An unique identification number issued by the Indian government to residents, facilitating access to services and serving as proof of identity.

Ethical Standards

The principles that guide behavior in the world of business, dictating the actions that are right or wrong in the workplace and beyond.