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Evergreen Corp

question 83

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Evergreen Corp.has two divisions,Fern and Bark.Fern produces a widget that Bark could use in the production of units that cost $175 in variable costs,plus the cost of the widget,to manufacture.Fern's variable costs are $60 per widget,and fixed manufacturing costs are applied at a rate of $36 per widget.Widgets sell on the open market for $105 each.Evergreen's policy is that internal transfers will be made at variable cost plus 20%.If Bark purchases the widgets from Fern,what will be the transfer price?

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Definitions:

W. Edwards Deming

An American engineer, statistician, professor, author, lecturer, and management consultant, known for his work in the field of quality management.

Wagner Act

U.S. legislation passed in 1935 that established the rights of employees to unionize, engage in collective bargaining, and take collective action, including striking.

Collective Bargaining

The process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights.

Human Relations Techniques

Approaches and methods used to improve interpersonal relationships, worker satisfaction, and productivity in the workplace.

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