A profit factor o at least 20 percent must be added to the

cost (including costs allocated from the corporale office) of Lhe GDB for internal transfer purposes. The outside customers are willing to pay P45 for the GDB. Demand over the next six months is estimated al 78,000 GDBs for internal use and 22,000 for external customers.

The computed cost plus price is P35.60. What should be The Transfer price used by the R&D Division? What factors

influenced your decision?

Costs: Direct materials P771,800 Direct labor 796,200 Overhead costs 410,300 Costs allocated from corporate office 988,700 A profit factor of at least 20 percent must be added to the cost (including costs allocated from the corporate office) of the GDB for internal transfer purposes. The outside customers are willing to pay P45 for the GDB. Demand over the next six months is estimated at 78,000 GDBs for internal use and 22,000 for external customers. The computed cost-plus price is P35.60. What should be the transfer price used by the R&D Division? What factors influenced your decision? (10 points)