Flash E-Card Manufacturing manufactures software parts for the computer software systems that produce e-cards.The Flash II part is currently manufactured in the Computer Department.The Data Department also produces the part and the plant has excess capacity to produce the Flash II part.The current market price of the Flash II part is $600.The managerial accountant reported the following manufacturing costs and variable expense data:
If the highest acceptable transfer price is $600 in the market,what is the lowest acceptable in-house price the Data Department should receive to produce the part in-house at the Computer Department?
A)$110
B)$120
C)$840
D)$1,070

Question

Flash E-Card Manufacturing manufactures software parts for the computer software systems that produce e-cards.The Flash II part is currently manufactured in the Computer Department.The Data Department also produces the part and the plant has excess capacity to produce the Flash II part.The current market price of the Flash II part is $600.The managerial accountant reported the following manufacturing costs and variable expense data: 
If the highest acceptable transfer price is $600 in the market,what is the lowest acceptable in-house price the Data Department should receive to produce the part in-house at the Computer Department?
A)$110 
B)$120 
C)$840 
D)$1,070

Quizplus · Accepted Answer

D)[$840 + $110 + $120] = $1,070

Flash E-Card Manufacturing Manufactures Software Parts for the Computer Software