Tiny Bikes is a prominent producer-packer-and-seller of mini-bicycles in Western Canada. The company has two distinct Divisions. Division L produces and sells one of its products to Division M, within the same consolidated group. Division L also sells the same product externally. The unit product costs to Division L consist of $129 for direct materials, $46 of direct labour, $10 of variable overhead, and $83 of fixed overhead. On external sales, Division L applies full cost-plus pricing, and charges a price equal to the full cost of the product plus a markup of 7%. Assuming Division L is currently operating at full capacity and can save $10 of variable costs for each unit transferred internally, 

what is the minimum transfer price it should charge Division M for each unit of production? 

Instructions: Round your final answer to two decimal places. Random example 1: round 5.452 to 5.45. Random example 2: round 7.568 to 7.57.

Answer rating: 100% (QA)

To determine the minimum transfer price Division L should charge Division M for each unit of product... View the full answer