The Following Costs Exist for Wiring Division of Corriander Corp

question 129

Essay

The following costs exist for Wiring Division of Corriander Corp. $$\begin{array} { | l | c | l | } \hline \text { Direct material } & \$ 67,500 & \\\hline \text { Direct labor } & 45,000 & \\\hline \text { Manufacturing overhead (25\% variable) } & 45,000 & \\\hline \text { Operating expenses ( } 30 \% \text { variable) } & 75,000 & \\\hline \text { Output } & 30,000 & \text { Units } \\\hline\end{array}$$ The output of the Wiring Division,which sells for $10/unit externally,is used by the Electrical Harness Division.Required:
Compute the transfer price for a unit of the Wiring Division's output using:
1)market price
2)variable production cost plus 30 percent
3)absorption cost plus 25 percent
4)variable cost
5)total cost plus 10 percent

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Definitions:

Process Innovation

The implementation of new or significantly improved production or delivery methods in a business.

Competitive Advantage

The attribute that allows an organization to outperform its competitors, leading to greater sales or margins and/or retaining more customers.

Keeping Customers

involves strategies and practices to retain customers, enhancing customer loyalty and preventing turnover.

Innovations

The process of translating an idea or invention into goods or services that create value or for which customers will pay.