Monty Corporation needs to set a target price for its newly designed product M14M16. The following data relate to this new product.

		Per Unit			Total
Direct materials		$ 42
Direct labor		$ 54
Variable manufacturing overhead		$ 12
Fixed manufacturing overhead					$ 1,411,200
Variable selling and administrative expenses		$ 7
Fixed selling and administrative expenses					$ 940,800

These costs are based on a budgeted volume of 78,400 units produced and sold each year. Monty uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%.

(a)

Compute the total unit variable cost, total unit fixed cost, and total unit cost for M14M16.

Variable cost per unit		$ enter a dollar amount
Fixed cost per unit		enter a dollar amount
Total cost per unit		$ enter a total amount

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Word Flint is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Quick Press. The book lines and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing books by authors under contract with the book lines owned by Word Flint, as well as authors under contract with other companies. The printing operation bills out at $0.01 per page, and a typical book requires 470 pages of print. A manager from Business Books, one of Word Flints book lines, has approached the manager of the printing operation offering to pay $0.006 per page for 1,500 copies of a 470-page book. The book line pays outside printers $0.008 per page. The printing operation's variable cost per page is $0.004. Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of the following situations.

(a)

Assume that the printing operation is booked solid for the next 2 years, and it would have to cancel an obligation with an outside customer in order to meet the needs of the internal division. (Round Transfer price to 4 decimal places, e.g. 0.1810.)

Printing should be done		select an option InternallyExternally
Minimum transfer price		$enter a dollar amount rounded to 4 decimal places