The display division of Raytech Inc. produces polarized glass required for LCD panels. The monitor division purchases pieces of the glass from the display division. The following data is available on the cost of glass that is transferred to the monitor division from the display division: Direct materials and direct labour cost per unit $32.00 Variable manufacturing overhead per unit 6.50 Fixed manufacturing overhead per unit 4.00 Variable transportation cost per unit 1.00 The display division also sells the polarized glass to outside suppliers and still has idle capacity. The selling price to outside suppliers is $65 per unit, and sales representatives are paid a commission of $2 per unit. Sales commissions are not paid on transfers to the monitor division. A competitor of the display division is currently selling the glass for $62 per unit to suppliers. Assuming that cost-plus-markup transfer prices are used and that the display division marks up its relevant transfer costs by 20%, what is the transfer price for glass?

Answer rating: 100% (QA)

To determine the transfer price for the polarized glass from the display division to the monit... View the full answer