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

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Read the requirements.

Requirement $1.$ What is the highest acceptable transfer price for the divisions?

The hiahest accestable transfer drice for the divisions is the Small Components Division's

Requirements

What is the highest acceptable transfer price for the divisions?

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.

Which transfer price would the manager of the Small Components Division prefer? Which transfer price would the manager of the Computer Division prefer?

If the company's policy requires that all in$-$house transfers must be priced at full absorption cost plus $16\%,$ 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 $$2\mathrm{.}00$ per unit. $($Round your answer to the nearest cent.$)$

If the company's policy requires that all in$-$house transfers must be priced at total manufacturing variable cost plus $16\%,$ what transfer price would be used? Assume that the company does not consider fixed manufacturing overhead in setting its internal transfer price in this scenario. $($Round your answer to the nearest cent.$)$

Assume now that the company does incur the variable selling expenses on internal transfers. If the company policy is to set transfer prices at $105\%$ of the sum of the full absorption cost and the variable selling expenses, what transfer price would be set? Assume that the fixed manufacturing overhead would drop by $$2\mathrm{.}00$ per unit as a result of the increased production resulting from the internal transfers. $($Round your answer to the nearest cent.$)$

More info

The division's manufacturing costs and variable selling expenses related to the video card are as follows:

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