Medlock Company has two divisions, Wheel and Chassis. The Wheel Dvision manufactures a wheel assembly that the Chassis Division uses. The variable cost to produce this assembly is $4.00 per unit; full cost is $5.00. The component sells on the open market for $9.00.

Medlock Company has two divisions, Wheel and Chassis. The Wheel Dvision manufactures a wheel assembly that the Chassis Division uses. The variable cost to produce this assembly is $4.00 per unit; full cost is $5.00. The component sells on the open market for $9.00. What will the transfer price be if Medlock uses a pricing rule of variable cost plus 40 percent? (Round your answer to 2 decimal places.) Transfer price