Homework Help is Here – Start Your Trial Now!
Business
Accounting
The machining division of Cullumber International has a capacity of 2,480 units. Its sales and cost data are: Selling price per unit $ 85 Variable manufacturing costs per unit 30 Variable selling costs per unit 7 Total fixed manufacturing overhead 213,700 The machining division is currently selling 2,280 units to outside customers, and the assembly division of Cullumber International

The machining division of Cullumber International has a capacity of 2,480 units. Its sales and cost data are: Selling price per unit $ 85 Variable manufacturing costs per unit 30 Variable selling costs per unit 7 Total fixed manufacturing overhead 213,700 The machining division is currently selling 2,280 units to outside customers, and the assembly division of Cullumber International

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Sagar

The machining division of Cullumber International has a capacity of 2,480 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit $ 85 30 Variable selling costs per unit 7 Total fixed manufacturing overhead 213,700 The machining division is currently selling 2,280 units to outside customers, and the assembly division of Cullumber 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 $7/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.) Minimum transfer price
Transcribed Image Text:The machining division of Cullumber International has a capacity of 2,480 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit $ 85 30 Variable selling costs per unit 7 Total fixed manufacturing overhead 213,700 The machining division is currently selling 2,280 units to outside customers, and the assembly division of Cullumber 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 $7/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.) Minimum transfer price
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Domestic transfer pricing
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS