Assume that there is no excess capacity in the frame division.

1. Use general rule to compute transfer price for window frames

2. Calculate transfer price if it is based on standard variable cost with a 10% markup

3. Use general rule to compute transfer price for window frames

4. Explain why your answers from Q1 and Q3 are different?

5. suppose the pre detemined fixed overbead rate in frame division is 125% of kabohr cost. Calculate Transfer price if it is based on standard full cost plus a 10% markup

6. Assume the transfwr price established in q2 is used. class division has been approached by a company with fhe special order for 1000 windows at $155. from perspective, should the order be accepted/rejected? Why?

Clearview window Company manufactures windows for the home-building industry. The window frames are produced to the frame division. The frames are then transferred to the class division, where the glass and hardware are installed. The company is best-selling product is a 3 by 4 foot, double paned operable window. The frame division also can sell frames directly to customers home builders, who installed the glass and hardware. The sales price for a frame is $80.00. The glass division sells its finished windows for dollars 190. The markets for both frames and finished windows exhibit perfect competition. the standard variable cost of the window is detailed as follows: Frame Division Glass Division Direct materials $15 $30* Direct Labour 20 15 Variable expenses 30 30 Total $65 $75 *Not including the transfer price for the frame