Supreme Window Company manufactures windows for the home builders. 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 double-paned window. The following data is for this particular product. The markets for both frames and finished windows exhibit perfect competition. The Frame Division has the option of either transferring the frames to the Glass division internally or sell them in the external market directly to custom home builders (Such home builders are capable of sourcing and installing the glass and hardware themselves) The following per unit budgeted costs of the Frame division and Glass division is available from the accounting system: Frame Division Glass Division Direct Material $39 $71 Direct Labor $40 $39 Variable overhead $71 $71 Note: The direct material cost given above for the Glass division excludes the transfer price paid to the Frame division. Fixed manufacturing overhead is being applied to both divisions as a function of Direct labor cost. Fixed manufacturing overhead 125.00% of Direct labor cost