Todd inc is in the process of developing a transfer price

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Todd Inc. is in the process of developing a transfer price for a part produced by Dept. A and used by other departments in manufacturing various products. Unit costs for the part are as follows:

  • Cost Categories:
  • Direct Materials=$8.10
  • Direct Labor=7.00
  • Variable OH=4.50
  • Fixed OH=4.40
  • Profit Markup(30 percent of cost)=?

Dept. B can purchase the part from an outside supplier at $29.50 per unit.
a) Develop the cost-plus transfer price for the part.

b) What should be the transfer price? Support your answer.

Reference no: EM13593528

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