The Assembly Division of Mounds Corporation makes a component part that the Packaging Division needs to purchase.The Assembly Division's variable cost of manufacturing the component is $25 per unit.The component is also available on the open market at a price of $52.The Packaging Division needs 800 units of the component and the Assembly Division has excess capacity of 1,000 units.
Required:
a.Calculate the total cost-based-transfer price that the Assembly division should charge the Packaging division.
b.Calculate the total market-based transfer price that the Assembly division should charge the Packaging division.

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The Answer of The Assembly Division of Mounds Corporation makes a component part that the Packaging Division needs to purchase.The Assembly Division's variable cost of manufacturing the component is $25 per unit.The component is also available on the open market at a price of $52.The Packaging Division needs 800 units of the component and the Assembly Division has excess capacity of 1,000 units.
Required:
a.Calculate the total cost-based-transfer price that the Assembly division should charge the Packaging division.
b.Calculate the total market-based transfer price that the Assembly division should charge the Packaging division.

The Assembly Division of Mounds Corporation Makes a Component Part