Gunnison Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: $\begin{array}{lr}
\text { Finished shelving: } \
\text { Direct materials } & \$ 30 \
\text { Direct labor } & 16 \
\text { Variable overhead } & 10 \
\text { Fixed overhead }& 12 \
\text { Variable selling expenses }& 8 \
\text { Fixed selling expenses }& 4
\end{array}$ The shelving is normally transferred internally from the Cutting Division to the Finishing Division. It also may be sold externally for $110 per hundred board feet. The minimum profit level accepted by the company is a markup of 20 percent. If the negotiated price is used, Gunnison Furniture's transfer price should be a
A)maximum of $100.80.
B)minimum of $84.00.
C)minimum of $80.00.
D)maximum of $110.00.

Question

Gunnison Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: $\begin{array}{lr}
\text { Finished shelving: }  \
\text { Direct materials } & \$ 30 \
\text { Direct labor } & 16 \
\text { Variable overhead } & 10 \
\text { Fixed overhead }& 12  \
\text { Variable selling expenses }& 8 \
\text { Fixed selling expenses }& 4
\end{array}$ The shelving is normally transferred internally from the Cutting Division to the Finishing Division. It also may be sold externally for $110 per hundred board feet. The minimum profit level accepted by the company is a markup of 20 percent. If the negotiated price is used, Gunnison Furniture's transfer price should be a
A)maximum of $100.80.
B)minimum of $84.00.
C)minimum of $80.00.
D)maximum of $110.00.

Quizplus · Accepted Answer

The Answer of Gunnison Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: $\begin{array}{lr}
\text { Finished shelving: }  \
\text { Direct materials } & \$ 30 \
\text { Direct labor } & 16 \
\text { Variable overhead } & 10 \
\text { Fixed overhead }& 12  \
\text { Variable selling expenses }& 8 \
\text { Fixed selling expenses }& 4
\end{array}$ The shelving is normally transferred internally from the Cutting Division to the Finishing Division. It also may be sold externally for $110 per hundred board feet. The minimum profit level accepted by the company is a markup of 20 percent. If the negotiated price is used, Gunnison Furniture's transfer price should be a
A)maximum of $100.80.
B)minimum of $84.00.
C)minimum of $80.00.
D)maximum of $110.00.

Gunnison Furniture Had the Following Historical Accounting Data, Per Hundred