(journal entries) Corporate Travel Division makes top-of-the-line computer bags and sells them to external buyers and to the Travel America Division in luggage sets sold. During the month just ended, Travel America acquired 4,000 bags from Corporate Travel Division, whose standard unit costs follow:

Travel America can acquire comparable bags externally for $80 each. Give the entries for each division for the past month if the transfer is to be recorded

a. at Travel America’s external purchase price.

b. at a negotiated price of variable cost plus 15 percent of full production cost.

c. by Corporate Travel at Travel America’s external price, and by Travel America at Corporate Travel’s variable production cost.

d. at Corporate Travel’s absorption cost. LO.1

Transcribed Image Text:

Direct material Direct labor Variable factory overhead Fixed factory overhead Variable selling expense Fixed selling and administrative expense $20 6 8 12 4 6