Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

More info The division's manufacturing costs and variable selling expenses related to the video card are as follows: The Computer Division of Martin Manufacturing can

image text in transcribedimage text in transcribedimage text in transcribed

More info The division's manufacturing costs and variable selling expenses related to the video card are as follows: The Computer Division of Martin Manufacturing can use the video card produced by the Small Components Division and is interested in purchasing the video card in-house rather than buying it from an outside supplier. The Small Components Division has sufficient excess capacity with which to make the extra video cards. Because of competition, the market price for this video card is $29 regardless of whether the video card is produced by Martin Manufacturing or another company. Requirement 1. What is the highest acceptable transfer price for the divisions? The highest acceptable transfer price for the divisions is the Small Components Division's outside sales only. The lowest acceptable transfer price for the divisions is the Small Components Division's The manager of the Small Components Division would prefer a transfer price of The manager of the Computer Division would prefer a transfer price of level needed to fill the transfer would result in fixed manufacturing overhead decreasing by $3.00 per unit. (Round your answer to the nearest cent.) Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH=Manufacturing overhead.) = Cost-plus transfer price The transfer price that would be used is Requirement 5. If the company's policy requires that all in-house transfers must be priced at total manufacturing variable cost plus 28%, what transfer price would be used? Assume that the company does not consider fixed manufacturing overhead in setting its internal transfer price in this scenario. (Round your answer to the nearest cent.) Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH= Manufacturing overhead.) =Transferprice The transfer price that would be used is Requirement 6. Assume now that the company does incur the variable selling expenses on internal transfers. If the company policy is to set transfer prices at 105% of the sum of the full absorption cost and the variable selling expenses, what transfer price would be set? Assume that the fixed manufacturing overhead would drop by $3.00 per unit as a result of the increased production resulting from the internal transfers. (Round your answer to the nearest cent.) Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH= Manufacturing overhead.) =Transferprice The transfer price that would be used is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Accounting

Authors: Robert N. Anthony, Leslie Pearlman Breitner

9th Edition

013149693X, 9780131496934

More Books

Students also viewed these Accounting questions

Question

When and how will strategy reviews take place?

Answered: 1 week ago

Question

Do you know how you will monitor progress?

Answered: 1 week ago