The Table Division of Timber Products, Inc. sell all of its output to the Finishing Division of the company. The only product of the Table Division is an unfinished table line that is used by the Finishing Division. The retail price of the table is P2,000 per table. Production quantity and cost data for 2020 are as follows: 

Tables	1,000
Direct Materials	P450,000
Direct Labor	300,000
Factory Overhead (25% is variable)	300,000
Operating Expenses (20% is variable)	500,000

 

Required: 

1. Determine the transfer price for the table using variable product costs plus 20% mark up.
2. Determine the transfer price for the table using absorption product cost plus 20%.

Answer rating: 100% (QA)

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