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Home Q & A Board Other Fields Homework Help Business Accounting
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minaebied minaebied
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A month ago
Lakeside Industries' operates as a decentralized organization. Its fishing gear division manufactures fishing lures. The fiberglass division manufactures one component needed by the fishing gear division. The fishing gear division has been purchasing the component from an outside supplier, but top management has suggested that all purchases be acquired from another Lakeside division if possible. Detailed unit cost for the fiberglass component needed to make lures is given below:

Price charged to regular customers$2.00
Direct material$0.80
Direct labor0.60
Manufacturing overhead  0.20
Total cost per unit$1.60

The manufacturing overhead is 60% fixed and 40% variable.

Required:

a.What is the transfer price if Lakeside uses the cost-based price?
b.What is the minimum transfer price?
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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tkane127tkane127
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A month ago
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More solutions for this book are available here
a.$1.60
b.$0.80 + $0.60 + ($0.20 × 40%) = $1.48
1

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minaebied Author
wrote...

A month ago
this is exactly what I needed
ofsuahasiufhoas
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Yesterday
Good timing, thanks!
hmonier
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2 hours ago
Thanks for your help!!
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