34 Plish Company ma nufactures only one type of washing mach

34) Plish Company ma nufactures only one type of washing machine and has two divisions, the and the Fabrication Division. The Compressor Division manufactures compressors compressors to the Fabrication Division. The market price for the Fabrication the range of 13,000-18,000 units. The fixed costs for pressor Division, for the Fabrication Division, Compressor Division \"sells\" on, which completes the washing machine and sells it to retailers. The Compressor mpressor is $60.00. (Ignore changes in inventory.) The fixed costs for the the Fabrication Division are assumed to be Division are assumed to be the same over $7.50 per unit at 18,000 units. Compressor\'s costs per compressor are $17 $13.00 Direct materials Direct labor Variable overhead Division fixed costs $10.50 Fabrication\'s costs per completed air conditioner are: Direct materials Direct labor Variable overhead Division fixed costs $164.00 $66.00 $20.00 $10.50 sion to the Fabrication What is the market-based transfer price per compressor from the Compressor Divi Division? A) $16.50 B) $33.00 C)$40.50 D) $60.00 Page 9 of 13

Solution

Market price for the comperessor is $60

So the market based transfer price of the comperessor is $60

So correct answer is D