The machining division of Sheridan International has a capacity of 2,130 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 75 Minimum transfer price $ 20 4 197,000 The machining division is currently selling 1,930 units to outside customers, and the assembly division of Sheridan 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 e.g. 5.25.)
The machining division of Sheridan International has a capacity of 2,130 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 75 Minimum transfer price $ 20 4 197,000 The machining division is currently selling 1,930 units to outside customers, and the assembly division of Sheridan 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 e.g. 5.25.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The machining division of Sheridan International has a capacity of 2,130 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
75
$
20
4
The machining division is currently selling 1,930 units to outside customers, and the assembly division of
Sheridan 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 e.g. 5.25.)
197,000
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