MC Qu. 169 manufacturer reports the following costs to produce... A manufacturer reports the following costs to produce 10,000 units in its first year of operations Direct materials, $10 per unit, Direct labor, 56 per unit, Variable overhead, $70,000, and Fixed overhead, $120,000. The total product cost per unit under variable costing is: 1. Assume the assembly division of Baxter Bicycles wants to buy 4.400 trailers per year from the trailer division. If the trailer division can sell all of the trailers it manufactures to outside customers, what price should be used on transfers between Baxter Bicycles's divisions? 2. Assume the trailer division currently only sells 10,400 trailers to outside customers, and the assembly division wants to buy 4,400 trailers per year from the trailer division. What is the range of acceptable prices that could be used on transfers between Baxter Bicycles's divisions