i dont understand why the transfer price is not the variable cost for the unit (2400*1000/10000)=240?? no intermediate market -> transfer price = variable costs. all other questions similar answer the question following that format. please help.

Tops Corporation is organized into two divisions Manufacturing and Marketing. Both divisions are considered to be profit centers and the two division managers are evaluated in large part on divisional income. The company makes a single product. It is fabricated in Manufacturing and then packaged and sold in Marketing. There is no intermediate market for the product The monthly income statements in thousands of dollars, for the two divisions follow. Production and sales amounted to 10,000 units. RAVOM Variable conte Contribution margin Fixed coste Divisional profit Manufacturing 0.000 2.400 600 500 5 100 Marketing $5,000 3.200 51.300 100 $ 500 The company has just received an offer to buy 1000 units of the product this month at a price of $400 per unit. The Marketing Division manager suggests that for the special order only, the transfer price be set at 50 percent of the sales price, or $200 per unit Required: a. What is the current transfer price for a unit? b. Does Tops Corporation want to accept this order? c. Will the Marketing Division manager be willing to accept this order if the transfer price is $200 per unit? d. Will the Manufacturing Division manager be willing to accept this order of the transfer price is $200 per unit? Answer is complete but not entirely correct. a Current transfer price per un Tony Cetider $ 2003 Art h Prev 1 of 6 Next >