The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division
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Question:
The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs variable costs of $ per windshield and has capacity to make windshields per year. The market price is $ per windshield. The Windshield division incurs total fixed costs of $ per year.
If the Windshield division is operating at full capacity, what transfer price should be used on transfers between the Windshield and Assembly divisions?
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