The machining division of Sunland International has a capacity of 2,490 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 20 6 213,700 The machining division is currently selling 2,290 units to outside customers, and the assembly division of Sunland 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.) Minimum transfer price $
The machining division of Sunland International has a capacity of 2,490 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 20 6 213,700 The machining division is currently selling 2,290 units to outside customers, and the assembly division of Sunland 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.) Minimum transfer price $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kk.244.
Transcribed Image Text:The machining division of Sunland International has a capacity of 2,490 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
6
213,700
The machining division is currently selling 2,290 units to outside customers, and the assembly division of Sunland 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.)
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