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San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles
San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow, Capacity (units) Sales price Variable costs Fixed costs Manufacturing 419,000 $ 438 $ 255 $40,190,000 Assembly 219,000 $ 1,395 $ 518 $24,190,000 For Manufacturing, this is the price to third parties. For Assembly, this does not include the transfer pnce paid to Manufacturing Required: . Current production levels in Manufacturing are 219.000 units Assembly requests an additional 59,000 units to produce a special order . What transfer price would you recommend? b. Suppose Manufacturing is operating at full capacity What transfer price would you recommend? c. Suppose Manufacturing is operating at 389,500 units. What transfer price would you recommend? (Round your answer to 2 decimal places.) a Optimal transfer price b. Transfer price Transfer price per unit per unit per unit
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