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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
Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products (Click the icon to view additional information.) Read the requirements More info Requirement 1. What is the highest acceptable transfer price for the d The division's manufacturing costs and variable selling expenses related to the video card are as follows: Cost per unit $ 16.00 1 $ 1.00 xpenses pertain to outside S 8.00 3.00 $ 5.00 $ 26 The highest acceptable transfer price for the divisions is the Small Cor market price Requirement 2. Assuming the transfer price is negotiated between the The lowest acceptable transfer price for the divisions is the Small Com Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (at current production level) $ Variable selling expenses The Computer Division of Martin Manufacturing can use the video card produced by the Smail 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 $26 regardless of whether the video card is produced by Martin Manufacturing or another company
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