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Other Fields Homework Help Accounting Topic started by: mhbtelc on Jan 29, 2023



Title: The Machining division makes a component part that the Assembly division needs for a new product. ...
Post by: mhbtelc on Jan 29, 2023
The Machining division makes a component part that the Assembly division needs for a new product. The Machining division's variable cost of manufacturing the component is $25 per unit. The component is also available on the open market at a price of $45 per unit. The Assembly division needs 900 units per year, and the Machining division has excess capacity of 1,000 units.

Required:

a.Determine the cost-based transfer price that the Machining division should charge the
Assembly division.
b.Determine the market-based transfer price that the Machining division should charge
the Assembly division.
c.What arguments will the Machining division's manager and the Assembly division's
manager make in an attempt to get the price each wants?


Title: The Machining division makes a component part that the Assembly division needs for a new product. ...
Post by: Sagxar on Jan 29, 2023
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