Weathermaster Window Company manufactures windows for the home-building industry. 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 companys best-selling product is a three-by-four-foot, doublepaned operable window.

The Frame Division can also sell frames directly to custom home builders, who install the glass and hardware. The sales price for a frame is $180. The Glass Division sells its finished windows for $490. The markets for both frames and finished windows exhibit perfect competition.

The standard cost of the window is detailed as follows:

	Frame Division				Glass Division
Direct material	$	41			$	49	*
Direct labor		40				41
Variable overhead		49				49
Total	$	130			$	139

*Not including the transfer price for the frame.

1.) Calculate the transfer price if it is based on standard variable cost with a 10 percent markup.

2-c.

Suppose the predetermined fixed-overhead rate in the Frame Division is 125 percent of direct-labor cost. Calculate the transfer price if it is based on standard full cost plus a 10 percent markup.

2-d.	The Glass Division has been approached by the U.S. Army with a special order for 2,100 windows at $319. Assume the transfer price established in requirement 2-c. above is being used.

(i)

What is the incremental contribution (loss) per window for Weathermaster Window Company as a whole if this special order is accepted?

2-e.	The Glass Division has been approached by the U.S. Army with a special order for 2,100 windows at $319. Assume the transfer price established in requirement 2-c. above is being used.

(i)	What is the incremental contribution (loss) per window for the Glass Division if this special order is accepted?