Zenith Co has two divisions: Processing & Assembly. The Processing Division

manufactures auto frame panels then transfers the panels to the Assembly Division where

the panels are assembled into finished auto frames. The Processing Division is currently

working at capacity. The Processing Division incurs variable costs of $ per unit to

manufacture and fixed manufacturing costs of $ Finished frame units can be sold

externally for $ per unit. Zenith manufactures and sells frames externally per

year.

a Using the general transfer pricing rule calculate the minimum transfer price at which the

Processing Division would sell frame panel units to the Assembly Division.