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Calculate the transfer price for the computer module

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Reference no: EM132624967

Question - Stellar Systems Company's Microprocessor Division sells a computer module to the company's Guidance Assembly Division, which assembles completed guidance systems. The Microprocessor Division is operating at full capacity. The computer module has variable costs of $10000, and it can be sold in the external market to companies in the computer industry for $13500.

Required -

1. Calculate the transfer price for the computer module using the general transfer pricing rule.

2. How would your solution change if the Microprocessor Division had spare capacity?

Reference no: EM132624967

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