The machining division of Oriole International has a capacity of 2,470 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Total fixed manufacturing overhead $ Minimum transfer price $ 80 30 6 198,900 The machining division is currently selling 2,270 units to outside customers, and the assembly division of Oriole International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $6/unit. What should be the transfer price in order not to affect the machining division's current profit? (Round answer to 2 decimal places e.g. 5.25.)

The machining division of Oriole International has a capacity of 2,470 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Total fixed manufacturing overhead $ Minimum transfer price $ 80 30 6 198,900 The machining division is currently selling 2,270 units to outside customers, and the assembly division of Oriole International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $6/unit. What should be the transfer price in order not to affect the machining division's current profit? (Round answer to 2 decimal places e.g. 5.25.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 4CE

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