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The machining division of Sunland International has a capacity of 2,320 units. Its sales and cost data are: Selling price per unit $ ta 85
The machining division of Sunland International has a capacity of 2,320 units. Its sales and cost data are: Selling price per unit $ ta 85 Variable manufacturing costs per unit 25 Variable selling costs per unit 6 Total fixed manufacturing overhead 178,200 The machining division is currently selling 2,120 units to outside customers, and the assembly division of Sunland 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 $6/unit. What should be the transfer price in order not to affect the machining division's current profit? (Round answer to 2 decimal places e.g. 5.25.) Minimum transfer price $ Division A produces a product that it sells to the outside market. It has compiled the following: Variable manufacturing cost per unit $10 Variable selling costs per unit $3 Total fixed manufacturing costs $150,000 Total fixed selling costs $30,000 Per unit selling price to outside buyers $40 Capacity in units per year 30,000 Division B of the same company is currently buying an identical product from an outside provider for $38 per unit. It wishes to purchase 5,000 units per year from Division A. Division A is currently selling 25,000 units of the product per year. If the internal transfer is made, Division A will not incur any selling costs. At what price would the internal transfer occur? It depends on the negotiation skills of the division managers. No transfer will occur. At the lowest price that is acceptable to Division A. At the maximum price that is acceptable to Division B
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