The machining division is currently selling 2,080 units to outside customers, and the assembly division of Sandhill 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 $4/unit. What should be the transfer price in order not to affect the machining division's current profit? (Round answer to 2 decimal places eg. 5.25.) Minimum transfer price

The machining division is currently selling 2,080 units to outside customers, and the assembly division of Sandhill 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 $4/unit. What should be the transfer price in order not to affect the machining division's current profit? (Round answer to 2 decimal places eg. 5.25.) Minimum transfer price

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The machining division of Sandhill International has a capacity of 2,280 units. Its sales and cost data are:
Selling price per unit
$
75
Variable manufacturing costs per unit
20
Variable selling costs per unit
4
Total fixed manufacturing overhead
217,100
The machining division is currently selling 2,080 units to outside customers, and the assembly division of Sandhill
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 $4/unit. What should be the transfer price in
order not to affect the machining division's current profit? (Round answer to 2 decimal places eg. 5.25.)
Minimum transfer price
$

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