The machining division of Sandhill International has a capacity of 2,500 units. Its sales and cost...

 

Transcribed Image Text:

The machining division of Sandhill International has a capacity of 2,500 units. Its sales and cost data are: Selling price per unit 2$ 75 25 Variable manufacturing costs per unit 7. Variable selling costs per unit Total fixed manufacturing overhead 176,500 The machining division is currently selling 2,300 units to outside customers, and the assembly division of Sandhill International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $7/unit. Assume that the units being requested are special high-performance units, and that the division's variable cost would be $23 per unit. What is the minimum transfer price that the machining division should accept? (Round The machining division of Sandhill International has a capacity of 2,500 units. Its sales and cost data are: Selling price per unit 2$ 75 25 Variable manufacturing costs per unit 7. Variable selling costs per unit Total fixed manufacturing overhead 176,500 The machining division is currently selling 2,300 units to outside customers, and the assembly division of Sandhill International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $7/unit. Assume that the units being requested are special high-performance units, and that the division's variable cost would be $23 per unit. What is the minimum transfer price that the machining division should accept? (Round

Answer rating: 100% (QA)

Variable cost per unit incurred for internal transfer 23 per unit Idle uni... View the full answer