Bonus_Problem_13-47_Template

# Bonus_Problem_13-47_Template - Name Bonus 6 P 13-47 Date...

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Name: __________________________ Date: ______________________ Bonus 6: P 13-47 your FINAL answers. In order to receive credit you must attach additional pages clearly showing your calculations. Partial credit will only be given if you show your work in a clean, organized way. Please make sure you sign stating that this is your individual work. Staple all pages together. Question 1: No Excess Capacity A. Transfer Price for window frames \$160 outlay Cost + opportunity cost =130+30 160.00 B. Transfer Price (10% markup) \$143 Standard Variable Cost + (10%) * (Standard va =130+10%*130 143.00 IT MAY BE NOTED THAT THE FRAME DIVISION MANAGER WOULD REFUSE TO TRANSFER AT THIS PRICE Question 2: Excess Capacity Outlay Cost + Opportunity cost A. Transfer Price for window frames \$130 =130+0 130 B. Explain in the space below or separate page: When there is no excess capacity, the opportunity cost is the forgone contribution margin on an external sale when a frame is transferred to the Glass Division. The contribution margin equals \$30 (\$160 – \$130). When there is excess

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Bonus_Problem_13-47_Template - Name Bonus 6 P 13-47 Date...

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