The Windshield division of Fast Car Co. makes windshields for use in Fast Car\'s

Question

The Windshield division of Fast Car Co. makes windshields for use in Fast Car's Assembly division The Windshield division incurs variable costs of $248 per windshield and has capacity to make 540,000 windshields per year. The market price is $565 per windshield. The Windshield division incurs total fixed costs of $3.450,000 per year. Assume the Windshield division is operating at full capacity. what transfer price should be used on transfers between the Windshield and Assembly divisions? anster pice pe ndshield 255

Explanation / Answer

There is no idle capacity of the Windshield division to fulffill the demand of Assembly Divison. So, if transfer takes place, outside sales is lost. Therfore, Minimum Acceptable Transfer Price = Selling Price of Windshield = $565 per Unit.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.