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you are required to write a report for mr ragwort about the proposed methods of meas 597857

The Oslo division and the Bergen division are divisions within the Baltic Group. One of the products manufactured by the Oslo division is an intermediate product for which there is no external market. This intermediate

product is transferred to the Bergen division where it is converted into a final

product for sale on the external market. One unit of the intermediate product is used

in the production of the final product. The expected units of the final product which

the Bergen division estimates it can sell at various selling prices are as follows:

Net selling price

Quantity sold

(£)

Units

100

1000

90

2000

80

3000

70

4000

60

5000

50

6000

The costs of each division are as follows:

Oslo

Bergen

(£)

(£)

(£)

Variable cost per unit

11

7

Fixed costs attributable to the products

60000

90000

You are required to write a report for Mr Ragwort about the proposed methods of measuring divisional performance, to comply with the terms of his instruction

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