Question
The machining division of ITA International has a capacity of 2,480 units. Its sales and cost data are: The machining division is currently selling 2,280
The machining division of ITA International has a capacity of 2,480 units. Its sales and cost data are:
The machining division is currently selling 2,280 units to outside customers, and the assembly division of ITA International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $7/unit. What should be the minimum transfer price in order not to affect the machining divisions current profit? (Round answer to 2 decimal places e.g. 5.25.)
$ 85 30 Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Total fixed manufacturing overhead 7 213,700Step by Step Solution
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