Pautner Company had the following historical accounting data per unit: $\begin{array}{llr}
\text { Direct materials } &\$60\
\text { Direct labour} &30\
\text {Variable overhead } &15\
\text { Fixed overhead } &24\
\text {Variable selling expenses } &45\
\text {Fixed selling expenses } &9\
\end{array}$

The units are normally transferred internally from Division A to Division B.The units also may be sold externally for $210 per unit.The minimum profit level accepted by the company is a markup of 30 percent.There was no beginning or ending inventories.
If the negotiated price is used,what should be Division A's transfer price?

Question

Pautner Company had the following historical accounting data per unit: $\begin{array}{llr}
  \text { Direct materials } &\$60\
 \text {  Direct labour} &30\
 \text {Variable overhead  } &15\
 \text { Fixed overhead } &24\
 \text {Variable selling expenses  } &45\
 \text {Fixed selling expenses  } &9\
\end{array}$

The units are normally transferred internally from Division A to Division B.The units also may be sold externally for $210 per unit.The minimum profit level accepted by the company is a markup of 30 percent.There was no beginning or ending inventories.
If the negotiated price is used,what should be Division A's transfer price?

Quizplus · Accepted Answer

The Answer of Pautner Company had the following historical accounting data per unit: $\begin{array}{llr}
  \text { Direct materials } &\$60\
 \text {  Direct labour} &30\
 \text {Variable overhead  } &15\
 \text { Fixed overhead } &24\
 \text {Variable selling expenses  } &45\
 \text {Fixed selling expenses  } &9\
\end{array}$

The units are normally transferred internally from Division A to Division B.The units also may be sold externally for $210 per unit.The minimum profit level accepted by the company is a markup of 30 percent.There was no beginning or ending inventories.
If the negotiated price is used,what should be Division A's transfer price?

Pautner Company Had the Following Historical Accounting Data Per Unit