Assume that there is no excess capacity in the Frame Division.

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

Required information [The following information applies to the questions displayed below.] Clearview Window Company manufactures windows for the home-building industry. The window frames are produced in the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The company's best-selling product is a three-by-four-foot, doublepaned operable window The Frame Division also can sell frames directly to custom home builders, who install the glass and hardware. The sales price for a frame is $200. The Glass Division sells its finished windows for $470. The markets for both frames and finished windows exhibit perfect competition. The standard variable cost of the window is detailed as follows: Frame Division $ 39 40 Glass Division $ 71* 39 Direct material Direct labor Variable overhead Total 71 71 $150 $181 *Not including the transfer price for the frame