Boat Hull Manufacturing produces boat parts at the manufacturing facility in Virginia.The managerial accountant reported that Boat Hull Manufacturing manufactures parts to repair the container ships that import products from China.The main part that Boat Hull Manufacturing produces is the T24 part.The Port Department produces the T24 part at the Boat Hull Manufacturing facility in Virginia.The managerial accountant reported that the Deport Department could also produce the T24 part because there is excess capacity at the facility.The managerial accountant reported the current market price of the T24 part is $825 and reported the following manufacturing cost and expenses data:
What is the highest transfer price the selling division would receive,and the buying division would pay,for the T24 part?

Question

Boat Hull Manufacturing produces boat parts at the manufacturing facility in Virginia.The managerial accountant reported that Boat Hull Manufacturing manufactures parts to repair the container ships that import products from China.The main part that Boat Hull Manufacturing produces is the T24 part.The Port Department produces the T24 part at the Boat Hull Manufacturing facility in Virginia.The managerial accountant reported that the Deport Department could also produce the T24 part because there is excess capacity at the facility.The managerial accountant reported the current market price of the T24 part is $825 and reported the following manufacturing cost and expenses data: 
What is the highest transfer price the selling division would receive,and the buying division would pay,for the T24 part?

Quizplus · Accepted Answer

B)The highest price the selling division should receive and the buying division would pay is the market price,or $825.

Boat Hull Manufacturing Produces Boat Parts at the Manufacturing Facility