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Compute the transfer price per unit using variable cost

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Problem 1: Compute the transfer price per unit a) using variable cost, and b) using variable cost plus 20% of Division 1 of a company selling its output to Division 2 of the same company. The market price per unit of output is 2,000. Additional data are:

Units 1,000

Direct materials 450,000

Direct labor 300,000

Factory overhead (25% variable) 300,000

Operating expenses (20% variable) 500,000

Reference no: EM132705121

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