Clear Wmdows manufactures windows for the home building industry. The window frames are produced in the frame division. The frames are then transferred to the glass division, where the glass and hardware are installed. The company's best selling product is a 1 x 1.2 metre, double-paned window. The standard cost of the window is detailed as follows: Frame Glass division division Direct material $45 $901 Direct labour 60 45 Variable overhead 90 90 Total standard cost $195 $225 * Not including the transfer price for the frame. The frame division can also sell frames directly to custom home builders, who install the glass and hardware. The sales price for a frame is $240. The glass division sells its finished windows for $570. Required: 1. Assume that there is no spare capacity in the frame division. 1. (a)Use the general rule to calculate the transfer price for window frames. 2. (b)Calculate the transfer price if it is based on standard variable cost with a 10 per cent markup. 2. Assume that there is spare capacity in the frame division. 1. (a)Use the general rule to calculate the transfer price for window frames. 2. (b)Explain why your answers to requirements 1(a) and 2(a) differ. 3. (c)Suppose that the predetermined fixed overhead rate in the frame division is 125 per cent of direct labour cost. Calculate the transfer price if it is based on standard absorption cost plus a 10 per cent markup. 4. (d)Assume the transfer price established in requirement 2(c) is used. The glass division has been approached by the management of a commercial construction company with a special order for 1 000 windows at $465 each. From the perspective of Clear Windows as a whole, should the special order be accepted or rejected? Explain your