FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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QS 22-19 (Algo) Determining transfer prices with excess capacity LO C1
The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs
variable costs of $296 per windshield and has capacity to make 590,000 windshields per year. The market price is $520 per
windshield. The Windshield division incurs total fixed costs of $3,750,000 per year.
If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between
the Windshield and Assembly divisions?
Transfer price per windshield will be at least
but not more than
Drav
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Transcribed Image Text:QS 22-19 (Algo) Determining transfer prices with excess capacity LO C1 The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs variable costs of $296 per windshield and has capacity to make 590,000 windshields per year. The market price is $520 per windshield. The Windshield division incurs total fixed costs of $3,750,000 per year. If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions? Transfer price per windshield will be at least but not more than Drav
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