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 variable manufacturing cost transfer price method is used without a fixed fee, Gunnison Furniture's transfer price will be
A)$56
B)$84
C)$64
D)$68

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 variable manufacturing cost transfer price method is used without a fixed fee, Gunnison Furniture's transfer price will be
A)$56
B)$84
C)$64
D)$68

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 variable manufacturing cost transfer price method is used without a fixed fee, Gunnison Furniture's transfer price will be
A)$56
B)$84
C)$64
D)$68

Gunnison Furniture Had the Following Historical Accounting Data, Per Hundred