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Required information (The following information applies to the questions displayed below.) Clearview Window Company manufactures windows for the home-building industry. The window frames are produced
Required information (The following information applies to the questions displayed below.) Clearview Window Company manufactures windows for the home-building industry. The window frames are produced in the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The company's best-selling product is a three-by-four-foot, doublepaned operable window. The Frame Division also can sell frames directly to custom home builders, who install the glass and hardware. The sales price for a frame is $200. The Glass Division sells its finished windows for $540. The markets for both frames and finished windows exhibit perfect competition. The standard variable cost of the window is detailed as follows: Direct material Direct labor Variable overhead Total Frame Division $ 46 48 76 $170 Glass Division $ 76 * 46 76 $198 *Not including the transfer price for the frame. ssume that there is no excess capacity in the Frame Division. Required: -a. Use the general rule to compute the transfer price for window frames. b. Calculate the transfer price if it is based on standard variable cost with a 10 percent markup. Assume that there is no excess capacity in the Frame Division. Required: 1-a. Use the general rule to compute the transfer price for window frames. 1-b. Calculate the transfer price if it is based on standard variable cost with a 10 percent markup. 1-a. Transfer price Transfer price 1-b
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