Business, 18.08.2019 02:10 frisha

Style division has the capacity to make 950,000 zippers per year, but due to a soft market, only plans to produce and sell 620,000 zippers next year. boot division currently buys zippers from an outside supplier for $3.50 each (the same price per unit that style receives for the 620,000 zippers it sells to external customers). if the divisions agree on a transfer price of $3.25 per zipper, then what is the financial advantage (or disadvantage) to the firm associated with internal trade? that is, by how much is quinn better off or worse off when boot division buys zippers from style division rather than buying zippers from the outside supplier?

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Style division has the capacity to make 950,000 zippers per year, but due to a soft market, only pla...

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