The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $7.80 per unit. Its variable cost is $2.97 per unit, and its fixed cost per unit is $1.55. Management would like the fastener division to transfer 11.200 of these zippers to another division within the company at a price of $2.97. The fastener division could avoid $0.43 per zipper of variable packaging costs by selling internally. Determine the minimum transfer price. (a) Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, eg. 10.50.) Minimum transfer price

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
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Chapter10: Short-term Decision Making
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The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $7.80 per unit. Its variable cost
is $2.97 per unit, and its fixed cost per unit is $1.55. Management would like the fastener division to transfer 11,200 of these zippers to
another division within the company at a price of $2.97. The fastener division could avoid $0.43 per zipper of variable packaging costs
by selling internally. Determine the minimum transfer price.
(a)
Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.)
Minimum transfer price
$
(b)
Assuming the fastener division is operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.)
Minimum transfer price
$
Transcribed Image Text:Current Attempt in Progress The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $7.80 per unit. Its variable cost is $2.97 per unit, and its fixed cost per unit is $1.55. Management would like the fastener division to transfer 11,200 of these zippers to another division within the company at a price of $2.97. The fastener division could avoid $0.43 per zipper of variable packaging costs by selling internally. Determine the minimum transfer price. (a) Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $ (b) Assuming the fastener division is operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $
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