The fastener division of Marigold Fasteners manufactures zippers and then sells them to customers for $7.40...
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The fastener division of Marigold Fasteners manufactures zippers and then sells them to customers for $7.40 per unit. Its variable cost is $3.24 per unit, and its fixed cost per unit is $1.72. Management would like the fastener division to transfer 12,700 of these zippers to another division within the company at a price of $3.24. The fastener division could avoid $0.15 per zipper of variable packaging costs by selling internally. Determine the minimum transfer price. (a) Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $ (b) Assuming the fastener division is operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $ The fastener division of Marigold Fasteners manufactures zippers and then sells them to customers for $7.40 per unit. Its variable cost is $3.24 per unit, and its fixed cost per unit is $1.72. Management would like the fastener division to transfer 12,700 of these zippers to another division within the company at a price of $3.24. The fastener division could avoid $0.15 per zipper of variable packaging costs by selling internally. Determine the minimum transfer price. (a) Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $ (b) Assuming the fastener division is operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $
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A Minimum transfer price can be computed as Variable cost Avoidable packaging cost Substituting th... View the full answer
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-1118096895
6th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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