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Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products. (Click the lcon
Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products. (Click the lcon to view additional information.) Read the requirements. Requirement 1. What is the highest acceptable transfer price for the divisions? The highest acceptable transfer price for the divisions is the Small Components Division's conversion costs direct materials plus variable manufacturing costs market price sale price variable costs Choose from any list or enter any number in the input fields and then click Check Answer More Info The division's manufacturing costs and variable selling expenses related to the video card are as follows: Cost per unit $14.00 6.00 $11.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (at current production level) Variable selling expenses 9.00 1.00 The Computer Division of Martin Manufacturing can use the video card produced by the Small Components Division and is interested in purchasing the video card in-house rather than buying it from an outside supplier. The Small Components Division has sufficient excess capacity with which to make the extra video cards. Because of competition, the market price for this video card is $34 regardless of whether the video card is produced by Martin Manufacturing or another company. Print Done
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