Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as...

80.2K

Verified Solution

Question

Accounting

imageimage

Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow: Capacity (units) Sales price * Variable costs Fixed costs Manufacturing 215,000 $ 108 $ 48 $ 10,150,000 Assembly 115,000 $ 375 $ 150 $ 6,150,000 * For Manufacturing, this is the price to third parties. For Assembly, this does not include the transfer price paid to Manufacturing. Required: Suppose Manufacturing is operating at full capacity when Assembly requests an additional 21,500 units to produce a special order. What transfer price would you recommend? Enter your answer as whole dollars. Do not enter $ or commas. Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow: Assembly 115,000 Capacity (units) Sales price * Variable costs Manufacturing 215,000 $ 108 $ 48 $ 10,150,000 $ 375 $ 150 Fixed costs $ 6,150,000 * For Manufacturing, this is the price to third parties. + For Assembly, this does not include the transfer price paid to Manufacturing. Required: Suppose Manufacturing is operating at 205,000 units when Assembly requests an additional 21,500 units to produce a special order. What transfer price would you recommend? Enter your answer as dollars using 2 decimal places. Do not enter $ or commas

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students