If Moonton Company instructed Northern Vale Division to supply Iron Hooks to Mooniyan Division, how much is the maximum transfer price that they can consider? (Round off your final answer to 3 decimal places) _____ 2. Continuing from Question No.1, how much is the minimum transfer price that they can consider? (Round off your final answer to 3 decimal places)
If Moonton Company instructed Northern Vale Division to supply Iron Hooks to Mooniyan Division, how much is the maximum transfer price that they can consider? (Round off your final answer to 3 decimal places) _____ 2. Continuing from Question No.1, how much is the minimum transfer price that they can consider? (Round off your final answer to 3 decimal places)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
_____ 1. If Moonton Company instructed Northern Vale Division to supply Iron Hooks to Mooniyan Division, how
much is the maximum transfer price that they can consider? (Round off your final answer to 3 decimal
places)
_____ 2. Continuing from Question No.1, how much is the minimum transfer price that they can consider?
(Round off your final answer to 3 decimal places)
Transcribed Image Text:Northem Vale is one of the divisions of Moonton Company. Northem Vale produces "Iron Hook" and can ourrently
well 79% of is anual capacity to outside customers. Mooniyan Division, anodher division of Moonton Company.
developod "acrod hammer" uhich uses the "ron Hook" as one of in direct materials plas another materials to be
purchasod from outside supplien. Mooniyan Division is wodking at full capacity and will roquire Northern Vale to
supply all the leon Hooks that they need. All the divisions of Moenton Company uses standard costing and properly
conmols the costs and computes for variances
The standard cost in producing I unit of lron Hook is as follows
Php 22
Direct material (22 bs e Po.)
Direct laber (4 h P6ah)
24
Factory overhead
*30 fined.
*"ludgsted annual fixod cost is P900,000
30
The standand cost in producing I unit of Sacrod Hammer is as follows
loon Hook (Ipe PS0)
Material X (15 hs P20)
Direct labor (0.5 dlhe P36h)
30
18
Variable Factory overhecad
Finod Factory overhead
14
12
"Based on anmual capacity of 40,000 units
Northem Vale oumrently sells the Iron Hook to outside customers at a mark-up of 10% on full standand cost while
Mooniyan was able to find a supplier of Iron Hook at P80.
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