Requirements 1-6.
Part 6 has 2 parts. It asks for The transfer price that would be used is ___.
Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products. More Info (Click the icon to view additional information.) Read the requirements The division's manufacturing costs and variable selling expenses related to the video card are Requirement 1. vvnat is the nignest acceptable transfer price for the divisions? as follows: The highest acceptable transfer price for the Cost per divisions is the Small Components Division's unit Direct materials $16.00's . Direct labor $ 3.00 Variable Requirement 2. Assuming the transfer price is negotiated between the divisions of the company, what would be the lowest acceptable transfer price? Assume variable selling expenses pertain to outside sales only. manufacturing The lowest acceptable transfer price for the overhead $ 9.00 divisions is the Small Components Division's Fixed manufacturing overhead 1's . (at current production Requirement 3. Which transfer price would the manager of the Small Components Division prefer? Which transfer price would the manager of the Computer Division prefer? level) $ 8.00 Variable selling The manager of the Small Components Division would prefer a transfer price of $ expenses $ 9.00 The manager of the Computer Division The Computer Division of Martin Manufacturing can use the video card produced by the Small would prefer a transfer price of 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 Requirement 4. If the company's policy requires that all in-house transfers must be priced at full absorption cost plus 12%, what transfer price would be used? Assume that the increased production level needed to fill the capacity with which to make the extra video cards. Because of competition, the market price answer to the nearest cent.) for this video card is $30 regardless of whether the video card is produced by Martin Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH = Manufacturing overhead.) Manufacturing or another company Cost-plus = transfer price i Requirements The transfer price that would be used is 1. What is the highest acceptable transfer price for the divisions? $ 2. Assuming the transfer price is negotiated between the divisions of the company, what would be the lowest acceptable transfer price? Assume variable selling Requirement 5. If the company's policy requires that all in-house transfers must be priced at total manufacturing variable cost plus 20%, what transfer price would be used? Assume that the company does not consider fixed expenses pertain to outside sales only answer to the nearest cent.) 3. Which transfer price would the manager of the Small Components Division prefer? Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH = Manufacturing overhead.) Which transfer price would the manager of the Computer Division prefer? Transfer 4. If the company's policy requires that all in-house transfers must be priced at full absorption cost plus 12%, what transfer price would be used? Assume that the price increased production level needed to fill the transfer would result in fixed The transfer price manufacturing overhead decreasing by $1.00 per unit. (Round your answer to the that would be used is nearest cent.) $ O. 5. If the company's policy requires that all in-house transfers must be priced at total manufacturing variable cost plus 20%, what transfer price would be used? Assume 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 101% of the sum of the full absorption cost and the variable sellin that the company does not consider fixed manufacturing overhead in setting its would drop by $1.00 per unit as a result of the increased production resulting from the internal transfers. (Round your answer to the nearest cent.) 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.) 6. Assume now that the company does incur the variable selling expenses on internal Transfer transfers. If the company policy is to set transfer prices at 101% of the sum of the full absorption cost and the variable selling expenses, what transfer price would be set? price Assume that the fixed manufacturing overhead would drop by $1.00 per unit as a result of the increased production resulting from the internal transfers. (Round your Choose from any list or enter any number in the input fields and then continue to the next question. answer to the nearest cent.)
