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Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $217 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $180 per unit. a. If a transfer price of $197 per unit is established and 43,300 units of materials are transferred, with no reduction in the Components Division's current sales, how much would Ziegler Inc.’s total operating income increase?
Answers: 3
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Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppl...
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