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Determine the minimum transfer price

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Question: The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $7.53 per unit. Its variable cost is $2.66 per unit, and its fixed cost per unit is $1.43. Management would like the fastener division to transfer 11, 900 of these zippers to another division within the company at a price of $2.66. The fastener division could avoid $0.34 per zipper of variable packaging costs by selling internally. Determine the minimum transfer price.

(a) Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer prices $

(b) Assuming the fastener division is operating at full capacity. (Round answer to 2 decimalplaces, e.g. 10.50.) Minimum transfer price $

Reference no: EM131756794

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