Question
Manufacturing Inc. has two divisions: Fabrication and Assembly Division. The Fabrication Division sells a partially completed component to outside buyers for further processing and assembly.
Manufacturing Inc. has two divisions: Fabrication and Assembly Division. The Fabrication Division sells a partially completed component to outside buyers for further processing and assembly. The Fabrication Divisions full manufacturing costs of this component is $462, which includes applied fixed-overhead costs of $44. The selling price to outsider buyers has been set at variable manufacturing cost plus a markup of 22%. The Fabrication Division is operating at full capacity. The Assembly Division requests 100 units of this component from the Fabrication Division. For the internal transfer, manufacturing costs can be lowered by $48 per unit. What would be the minimum transfer price per unit?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started