Flash

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Manufacturing manufactures software parts for the computer software systems that produce

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The Flash II part is needed in the Computer Department. The Data Department produces the part and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $1,700. The managerial accountant reported the following manufacturing costs and variable expense data:Flash

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Manufacturing

Manufacturing Costs and Variable Expense Report

Flash II Component

Direct materials	$810
Direct labor	$160
Variable manufacturing overhead	$140
Fixed manufacturing overhead (current production level)	$185
Variable selling expenses (only incurred on sales to outside consumers)	$136

If the highest acceptable transfer price is $1,700 in the market, what is the lowest acceptable

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price the Data Department should receive to produce the part

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at the Computer Department?

A.

$160

B.

$1,110

C.

$140

D.

$810