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Atlanta Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The Compressor Division manufactures compressors
Atlanta Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The Compressor Division manufactures compressors for the Fabrication Division, which completes the washing machine and sells it to retailers. The Compressor Division sells compressors to the Fabrication Division. The market price for the Fabrication Division to purchase a compressor is $60.00 (Ignore changes in inventory) The fixed costs for the Compressor Division are assumed to be the same over the range of 8000-13.000 units. The fixed costs for the Fabrication Division are assumed to be $11.50 per unitat 13.000 units. Compressor's cost per compressor are Direct materials $18 Direct labor $17.00 Variable overhead $6.50 Division fixed costs 58.00 Fabrication costs per completed air conditioner are: Direct materials $162.00 Direct labor $66.00 Variable overhead $23.00 Division fixed costs 58.00 What is the transfer price per compressor from the Compressor Division to the Fabrication Division if the transfer price per compressor is 110% of full costs $49.50 $47.30 $54.45 $19.80
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