Calculating Transfer Price

and sold to grocery stores for $$35$ per batch. Jelkin is able to produce $400,000$ batches per year and reports the following costs per batch:

Required:

What is the minimum transfer price the puree division manager would accept?

$

What is the maximum transfer price the finishing division would accept?

$

Assuming the $400,000$ batches are transferred to the finishing division, compute the operating income for each division using:

$($a$)$ market price for the transfer price. Round your answers to two decimal places, if necessary.

i$.$ Puree Division Operating Income.

Jelkin Corporation

Puree Division Operating Income

blank

Per Batch For $400,000$ Batches

Sales revenue $fill in the blank

$fill in the blank

Less:

Direct material cost fill in the blank

fill in the blank

Direct labour cost fill in the blank

fill in the blank

Variable overhead fill in the blank

fill in the blank

Fixed overhead fill in the blank

fill in the blank

Total $fill in the blank

$fill in the blank

Question Content Area

ii$.$ Finishing Division Operating Income.

Jelkin Corporation

Finishing Division Operating Income

blank

Per Batch For $400,000$ Batches

Sales revenue $fill in the blank

$fill in the blank

Less:

Transferred$-$in costs fill in the blank

Direct material cost fill in the blank

fill in the blank

Direct labour cost fill in the blank

fill in the blank

Variable overhead fill in the blank

fill in the blank

Fixed overhead fill in the blank

fill in the blank

Total $fill in the blank

$fill in the blank

Question Content Area

$($b$)$ full manufacturing cost plus $10$ percent for the transfer price. Round your answers to two decimal places, if necessary.

i$.$ Puree Division Operating Income.

Jelkin Corporation

Puree Division Operating Income

blank

Per Batch For $400,000$ Batches

Sales revenue $fill in the blank

$fill in the blank

Less:

Direct material cost fill in the blank

fill in the blank

Direct labour cost fill in the blank

fill in the blank

Variable overhead fill in the blank

fill in the blank

Fixed overhead fill in the blank

fill in the blank

Total $fill in the blank

$fill in the blank

Question Content Area

ii$.$ Finishing Division Operating Income.

Jelkin Corporation

Finishing Division Operating Income

blank

Per Batch For $400,000$ Batches

Sales revenue $fill in the blank

$fill in the blank

Less:

Transferred$-$in costs fill in the blank

fill in the blank

Direct material cost fill in the blank

Direct labour cost fill in the blank

fill in the blank

Variable overhead fill in the blank

fill in the blank

Fixed overhead fill in the blank

fill in the blank

Total