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Required information

Problem $13-46$ Comprehensive Transfer$-$Pricing Problem; Ethics $($LO $13-6,13-7,13-8)$

$[$The following information applies to the questions displayed below.$]$

Clearview Window Company manufactures windows for the home$-$building industry. The window frames are produced in

the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The

company's best$-$selling product is a three$-$by$-$four$-$foot, doublepaned operable window.

The Frame Division also can sell frames directly to custom home builders, who install the glass and hardware. The sales

price for a frame is $$180.$ The Glass Division sells its finished windows for $$490.$ The markets for both frames and finished

windows exhibit perfect competition.

The standard variable cost of the window is detailed as follows:

$*$Not including the transfer price for the frame.

Problem $13-46$ Part $1$

Assume that there is no excess capacity in the Frame Division.

Required:

$1-$a$.$ Use the general rule to compute the transfer price for window frames.

$1-$b$.$ Calculate the transfer price if it is based on standard variable cost with a $10$ percent markup.