Landscape Manufacturing Company has three divisions. Engine components are transferred from Components to Assembly. Assembled engines are transferred from Assembly to the Mower Division. Costs for each division are given below. Mowers are sold on in a competitive outside market for $250.
All transfers are made at 130% of variable cost. During this period, Components sends Assembly 10,000 packages of engine components. Assembly then sends the Mower division 10,000 assembled engines.
What is the transfer price the Mower Division pays Assembly for engines? (Note: Transfers from one division to another are treated as a variable cost of the buying division.)

Question

Landscape Manufacturing Company has three divisions. Engine components are transferred from Components to Assembly. Assembled engines are transferred from Assembly to the Mower Division. Costs for each division are given below. Mowers are sold on in a competitive outside market for $250.
  All transfers are made at 130% of variable cost. During this period, Components sends Assembly 10,000 packages of engine components. Assembly then sends the Mower division 10,000 assembled engines.
What is the transfer price the Mower Division pays Assembly for engines? (Note: Transfers from one division to another are treated as a variable cost of the buying division.)

Quizplus · Accepted Answer

The Answer of Landscape Manufacturing Company has three divisions. Engine components are transferred from Components to Assembly. Assembled engines are transferred from Assembly to the Mower Division. Costs for each division are given below. Mowers are sold on in a competitive outside market for $250.
  All transfers are made at 130% of variable cost. During this period, Components sends Assembly 10,000 packages of engine components. Assembly then sends the Mower division 10,000 assembled engines.
What is the transfer price the Mower Division pays Assembly for engines? (Note: Transfers from one division to another are treated as a variable cost of the buying division.)

Landscape Manufacturing Company Has Three Divisions