Return to 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: Frame Division Glass Division Direct naterial Direct labor 46 Variable overhead 76 Total $198 $ 76 $ 46 48 76 $170 *Not including the transfer price for the frame. 2-a. Assume that there is excess capacity in the Frame Division. Use the general rule to compute the transfer price for windo frames 2.c. Suppose the predetermined fixed-overhead rate in the Frame Division is 125 percent of direct-labor cost Calculate the transfer price if it is based on standard full cost plus a 10 percent markup. 2.d. The Glass Division has been approached by the US Army with a special order for 2,600 windows at $398. Assume the transfer price established in requirement 2-c. above is being used. 1. What is the incremental contribution (loss) per window for Clearview Window Company as a whole if this special order is accepted? II. From the perspective of Clearview Window Company as a whole, should the special order be accepted or rejected? 2-e. The Glass Division has been approached by the U.S. Army with a special order for 2,600 windows at $398. Assume the transfer price established in requirement 2.c. above is being used. 1. What is the incremental contribution (loss) per window for the Glass Division if this special order is accepted? II. Will an autonomous Glass Division manager accept or reject the special order? Complete this question by entering your answers in the tabs below. Req 2A Req 20 Reg 2D Reg 2011 Req 21 Reg 2E The Glass Division has been approached by the U.S. Army with a special order for 2,600 windows at $398. Assume the transfer price established in requirement 2-c. above is being used. What is the incremental contribution (loss) per window for Clearview Window Company as a whole if this special order is accepted? Contribution (loss) per window $ (89) Reg 2A Reg 20 Reg 2D Reg 2D Reg 2E Reg 2E 1 Suppose the predetermined fixed-overhead rate in the Frame Division is 125 percent of direct-labor cost. Calculate the transfer price if it is based on standard full cost plus a 10 percent markup. Transfer price $ 253
