Milwaukee Metallurgy Corporation (MMC) has two divisions. The Fabrication Division transfers partially completed components to the Assembly Division at a predetermined transfer price. The Fabrication Divisions standard variable production cost per unit is $455. The division has no excess capacity, and it could sell all of its components to outside buyers at $580 per unit in a perfectly competitive market.

5.

value: 8.33 points

Required information

Required:

1.	Determine a transfer price for MMC using the general rule.

6.

value: 8.35 points

Required information

2.	What would be the transfer price if the Fabrication Division had excess capacity?