The Bat Division of Baseball Company Has Just Revised Its

question 74

Essay

The Bat Division of Baseball Company has just revised its actual cost data for the current year.Bat Division transfers goods to the Sport Division.Sport Division can buy the same goods in the open market for $122 each.Bat's new cost data are as follows:
$\begin{array}{llr} \text { Direct materials } &\$40\\ \text {Direct labour } &30\\ \text { Variable overhead } &10\\ \text { Fixed overhead} &16\\ \text {Variable selling expenses } &6\\ \text { Fixed selling and administrative expenses } &12\\ \text { Total costs } &\$114\\ \text {Desired return } &20\\ \text { Sales price } &\$134\\\end{array}$
Current production is 200,000 units,and the Bat Division has a capacity of 300,000 units.
a.What is the lowest price the Bat Division should charge for the internal transfers of its goods?
b.What is the highest price the Sport Division should pay for the units?
c.Give the primary reason that the Bat Division should reduce its price.

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Definitions:

Skewed To The Left

Describes a distribution of data where the tail is longer on the left side of the distribution graph, indicating that the bulk of the data points are to the right.

Symmetric

Refers to a balance or similarity between two halves of an object, dataset, or distribution where each side is a mirror image of the other.

Percent Frequency

The relative frequency of an event or characteristic expressed as a percentage of the total number of occurrences or observations.