Question
Chemical Company has two divisions, the Mixing Division and Bottling Division. The Mixing Division sells chemicals to the Bottling Division. Standard costs for the Mixing
Chemical Company has two divisions, the Mixing Division and Bottling Division. The Mixing Division sells chemicals to the Bottling Division. Standard costs for the Mixing Division are as follows:
Direct materials | $3.00 per gallon |
Direct labor | 2.40 per gallon |
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The Bottling Division uses the following predetermined overhead rate:
Variable overhead | $3.60 per gallon |
Fixed overhead | 2.40 per gallon |
Total | $6.00 per gallon |
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What is the transfer price for the chemicals per gallon based on standard variable cost? Round your answer to two decimal places and enter with no symbols.
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