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Production Inc. has two divisions: Machining and Assembling. The Machining Division is currently operating at maximum capacity by producing one existing product for $21 per
Production Inc. has two divisions: Machining and Assembling. The Machining Division is currently operating at maximum capacity by producing one existing product for $21 per unit and selling it to outside buyers at $38 per unit. The Assembling Division requests from the Machining Division to machine 25 units of a new product that takes 0.5 of the time to produce than the existing product sold to outside markets. The variable cost for producing this new product is $15. What would be the minimum transfer price per unit?
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