Atascadero Industries operates a Manufacturing Division and a Marketing Division Both divisions are evaluated as...
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Atascadero Industries operates a Manufacturing Division and a Marketing Division Both divisions are evaluated as profit centers. Marketing buys products from Manufecturing and packages them for sale. Manufacturing sells many components to third parties in addition to ds Marketing. Selected data from the two operations follow data from the two opfoo Manufacturing Marketing Capacity (units) Sales pricea Variable costs Foxed costs 1,000,000 S 14004,550 $5601,680 $10,000,000 $7.200000 For Manufacturing, this is the price to third parties. b For Marketing, this does not include the transfer price paid to Manufacturing Required: a. Current production levels in Manufacturing are 600,000 units. Marketing requests an additional 100,000 units to produce a special order What transfer price would you recommend? Transfer price per unit b. Suppose Manufacturing is operating at full capacity. What transfer price would you recommend? per unit
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