Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products.

Requirement 4. If the?company's policy requires that all?in-house transfers must be priced at full absorption cost plus 5?%, what transfer price would be?used? Assume that the increased production level needed to fill the transfer would result in fixed manufacturing overhead decreasing by $1.00 per unit. ?(Round your answer to the nearest?cent.)

Why I calculated the answer for requirement 4 is 30.45 is a wrong answer? How to calculate requirement 4?

Cost per unit Direct materials $ 9.00 Direct labor $ 1.00 Variable manufacturing overhead $ 8.00 Fixed manufacturing overhead (at current production level) $ 10.00 Variable selling expenses $ 6.00 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 sufcient excess capacity with which to make the extra video cards. Because of competition, the market price for this video card is $30 regardless of whether the video card is produced by Martin Manufacturing or another company. V 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 market price $ 30 . Requirement 2. Assuming the transfer price is negotiated between the divisions of the company, what would be the lowest acceptable transfer price? Assume variable selling expenses pertain to outside sales only. The lowest acceptable transfer price fortne divisions is the Small Components Division's variable costs $ 18 _ Requirement 3. Which transfer price would the manager of the Small Components Division prefer? Which transfer price would the manager of the Computer Division prefer? The manager of the Small Components Division would prefer a transfer price of $ 30 The manager of the Computer Division would prefer a transfer price of $ 18Requirement 4. If the company's policy requires that all inhouse transfers must be priced at full absorption cost plus 5%, what transfer price would be used? Assume that the increased production level needed to ll the transfer would result in xed manufacturing overhead decreasing by $1.00 per unit. (Round your answerto the nearest oenf.) Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH = Manufacturing overhead.) (Variable Cost + Fixed MOH Cost) 3' 1.05 = Costplus transfer price The transfer price that would be used is E